Collecting a 60% tax on the purchase and sale of housing – Tejaratnews
According to Tejarat News, the head of the housing economics office of the Ministry of Roads and Urban Development announced the amount of transaction tax for the purchase and sale of housing.
Abolfazl Nowrozi said: If the time interval between the transfer of ownership is less than one year, the seller pays 60% of the price difference between the time of acquisition and transfer of ownership, 40% between one and two years, 20% between two and three years, between three 10% up to four years and 5% between four and five years as tax.
Abolfazl Nowrozi, head of the housing economics office of the Ministry of Roads and Urban Development, added: In the review meeting on housing market developments, which was held in the presence of the honorable first vice president, the ministers of road and urban development and economy, the heads of the Central Bank and the Planning and Budget Organization, as well as the officials of the relevant institutions; It was decided to make a decision regarding the tax plan on frequent housing transactions with urgency, and after approval by the government board, a two-urgent bill should be submitted to the Islamic Council.
He added: After this decision, the Ministry of Roads and Urban Development and the relevant agencies quickly conducted an expert review of the dimensions of the issue and finally jointly finalized the text of the bill and presented it to the government board for approval.
Nowrozi said: According to this bill, all natural and legal persons who attempt to acquire a residential unit or land with residential use by any means after the promulgation of this law, in the case of the transfer of ownership by any means to another natural or legal person in less than five years If they act after the date of acquisition, they will be subject to the tax on repeated transactions.
Stating that the mechanism of this tax base was designed in such a way that the target group is only traders, he clarified: ordinary people and consumer demand are not subject to paying taxes on frequent transactions.
The head of the housing economics office of the Ministry of Roads and Urban Development continued: Also, according to the text of the bill, if a natural or legal person acquires only a residential unit or a plot of land with residential use, in case of transfer of ownership, the same property is not subject to tax and the transfer of ownership is subject to Inheritance, property transferred due to acquisition from the place of execution or judgments of judicial or coercive courts are not subject to the payment of tax on repeated transactions.
Nowrozi said: The purpose of taxing frequent transactions is to prevent speculation in the housing market. Unfortunately, in recent years, the entry of speculative demand into the housing market has caused an irrational growth in the price of this basic commodity, and speculators, in order to gain more profit, repeatedly buy and sell several properties or by hoarding them, they take the price pulse of the market.
Stating that speculative and non-consumptive demand has caused disturbances in the supply of consumer housing (consumer demand), he stated: the activity of speculators has caused the increase in housing prices to reduce people’s purchasing power and the society is forced to move towards the rental market. So that the weak sections of the society are waiting for years to buy a house for their consumption, and on the other hand, traders are getting richer day by day without taking any risk.
Nowrozi said: In this situation, adopting appropriate policies to increase the cost of speculative demands will direct capital towards production and prevent instability and price increases caused by speculative activities in the housing market, and one of these policies is the tax on frequent transactions. which increases the cost of many transactions in a short time.
He continued: This tax is collected from the seller as a percentage of the profit of the transaction and through the reverse staircase; This means that the shorter the time interval between the purchase and sale of the property, the higher the rate of this tax will be, and the amount of tax will decrease over time.
The Head of the Housing Economics Office of the Ministry of Roads and Urban Development stated: For this purpose, in this bill, if the time interval between the transfer of ownership is less than one year, the seller will pay 60% of the price difference between the time of acquisition and the transfer of ownership, between one and two 40% per year, 20% between two and three years, 10% between three and four years and finally 5% between four and five years as tax.
Nowrozi continued: The government’s goal regarding the imposition of this tax is to organize the housing market, the tax on frequent transactions is the most important tool that serves production and prevents frequent buying and selling in a short period of time and price fixing, and by increasing the transaction cost in a short period of time. It provides the conditions to direct liquidity towards production.
He said: receiving this tax will increase the incentives to invest in productive and economic-promoting activities, and activities without added value will become useless. Naturally, with the development of production activities, especially housing construction, employment will be created, and finally, with the reduction of the class gap, people’s welfare will increase.
Source: Senate