Approval of the plan to control and organize residential property leases

According to Tejarat News, MPs in order Control and organization Residential property leases approved the Dufourite plan.

Under the plan, landlords who follow the law will face easier repayment of housing facilities, and landlords who do not meet the rent increase ceiling will face double taxation.

According to TasnimGiven that landlords receive rent rents is one of the ways they generate revenue, the government can adopt incentive and punitive policies to regulate this issue. In this way, landlords are encouraged to obtain lower rents and to avoid receiving unconventional rents.

In this regard, it is proposed in the parliament plan that those landlords who have registered their lease contract in the notary public office or in the real estate and housing system subject to Article (18) of the Housing Production Leap Law and announce the amount of their rents to increase the annual index of goods. The Central Bank, as mentioned in Article (522) of the Code of Civil Procedure, to benefit from the privilege of receiving housing purchase and reconstruction facilities out of turn and with guarantees and easier repayment than other candidates, and to reduce the fees and taxes collected from them. .

On the other hand, landlords who have increased rents in their lease contract by more than the above index will be required to pay double rental income tax on the excess amount.

In this way, a solution can be considered that without direct interference in the private agreements of individuals in transactions and legal and sharia objections to it, and at the same time, with regulation and policy-making, individuals can be led to determine standard rents.

Also, by anticipating some non-criminal mechanisms, he guaranteed the appropriate performances to oblige the landlords to register their contract in the relevant systems, and these mechanisms can be predicted in terms of ta’zir.

The plan has been approved by the parliament as a matter of urgency and is currently being considered by the relevant commission. It should be noted that experts always emphasize the role of taxes as a tool of government regulation.

As a result, taxes will be used as a punitive tool for landlords who raise rents above the set ceiling. The implementation of this plan requires transparency of lease agreements and their registration in the system of the Property and Deeds Registration Organization, as well as the real estate and housing system for the use of the Tax Affairs Organization.

This issue is also being considered by lawmakers, and real estate consultants and real estate agents are required to send a copy of the regulatory lease to the local tax office. Otherwise, they have joint and several liability in the relevant tax.

According to the current text of the current plan for organizing the rent of residential real estate, if a lender increases the rent more than the amount set based on the increase in prices announced by the Central Bank, his tax exemption will be eliminated and the excess rent increase will be subject to 50% tax. .

This will impose a significant cost on the owner of the property who does not follow this rule, and this can guarantee proper implementation.

Plan to control and organize residential property rents

Article 1: Landlords are obliged to prepare the lease contract in notaries or in the electronic system of real estate transactions of the country to which real estate brokers (including real estate consultants and real estate agencies) are connected for free in accordance with Article 18 of the law. Enter the leap in housing production.

If the lease agreement is mediated by brokers, real estate consultants and real estate agencies and is not listed in the system, brokers, real estate consultants and real estate agents, by the branches of the State Penitentiary Organization, in addition to a fine equal to three times the fee, In the first instance they are sentenced to one year deprivation and in the second instance to permanent deprivation of employment in the said job.

Also, a landlord who has not registered his regulatory lease contract in the above manner will be subject to the following provisions regarding ta’zir:

– The total amount received as a result of the lease contract (whether Qarz al-Hasna during the contract or leases) is considered as net income subject to tax subject to Article (53) of the Law on Direct Taxes.

– The cost of litigation for his claims regarding the tenant against the tenant will be 4 times the cost of legal proceedings. His eviction lawsuit against the tenant is also subject to court costs based on the sum of the rents and the good loan contained in the contract. In such cases, the landlord will have the right to refer to the tenant only up to the limit of the court fees stipulated in the relevant laws.

– The handling of any kind of lawsuit of the landlord against the tenant will be subject to the submission of a tax settlement in accordance with the provisions of this law.

Note 1: The tariff of the commission of real estate brokers (including real estate consultants and real estate agencies) will be determined by the Ministry of Roads and Urban Development based on the following criteria:

1. The tariff shall be determined on the basis of a coefficient of the transaction value of the property subject to Article (64) of the Law on Direct Taxes with subsequent amendments and additions.

2. The average annual draft volume of registered contracts, the subject of this article in each geographical area, shall affect the determination of tariffs in a descending manner.

3- The amount of the received tariff should be determined in each transaction. In any case, the amount of rents will not affect the amount of tariffs and receiving any amount – even with the agreement of the parties to the transaction or any of them – under any heading such as copyright or fee is prohibited to insert a draft contract in the system subject to this article. The State Penitentiary Organization is sentenced to a fine equal to three times the amount received.

Note 2: The tariff of real estate brokers (including real estate consultants and real estate agencies) and the copyright of notaries to register the extension of the lease agreement between the parties will be ten percent depending on the tariff and the copyright announced by the relevant authorities for concluding and registering the lease.

It is also the case whenever the parties to a lease contract, without the mediation of the above-mentioned brokers, arrange their contract and refer to these consultants only to enter their contract in the real estate consulting system. Receiving more than the sentence of this note by the real estate brokers is a violation and the violator is sentenced to a fine equal to three times the amount received by the sentence of the branches of the State Penitentiary Organization.

Article 2 – If in the property lease contract, the rent determined in comparison with the previous year’s rent of the property registered in the system, increases more than the annual price index change mentioned in Article (522) of the Code of Civil Procedure, in addition to cancellation Tax exemption subject to Note (11) of Article (53) of the Law on Direct Taxes, in compliance with Articles (53) and (54) of the said Law, regarding the excess amount will be subject to a fifty percent (50%) increase in property rental income tax. Real estate consultants are required to submit a copy of the regulatory lease agreement to the local tax office. Otherwise, they have joint and several liability in the relevant tax.

Note 1: If the property is rented for the first time or does not have a history of rent registered in the previous year or the landlord claims that his rent in the previous year was less than the fair price of the day, the maximum rent that can be determined for that property can not exceed ten percent The amount of rent in regulatory lease agreements in that year should be further determined based on the relevant area and region, otherwise it will be subject to the said tax.

Note 2: The lease contract for a period of two years or more will not be subject to the provisions of this article.

Article 3 – Landlords who attempt to arrange their lease agreement in notaries or register it in the electronic system of document registration to which real estate brokers (including real estate consultants and real estate agencies) are connected and the amount of rent increase They shall not exceed the amount mentioned in the previous article, from the sources obtained from the implementation of this law and in proportion to the received sources, they will enjoy a discount of up to 50% of renovation fees, as well as reducing profits and increasing the repayment period of property purchase and reconstruction facilities. The executive regulations of this article shall be prepared with the participation of the Ministries of Roads and Urban Development, Economic Affairs, Finance and the Interior and shall be approved by the Cabinet.