Regulating the rental market by imposing a 10% tax on empty houses – Tejaratnews
According to Tejarat News, the Majlis Research Center, in a report examining the foundations, works, experiences of countries and executive requirements regarding the tax on empty houses, wrote: The statistics of the 2-fold growth of the rental rate from 1375 to 1395, shows the decrease in the purchasing power of the people. In the field of housing and the need to complete information bases and effective policies in the housing and rental market.
According to this report, imposing a tax on empty houses in the country can change the motivations that encourage some people not to offer their empty houses for rent. This tax base, in addition to being a regulatory tax, makes it possible to supply empty units to the market, it can also create a suitable income for the government, which can increase the supply of housing by allocating and optimally directing the resulting resources towards the construction of low-cost housing.
On the other hand, the creation of real estate information infrastructure as well as the place of residence can provide a policy platform in addition to housing in other areas, including family-based support policies and other taxes in the housing area. Therefore, the empty house tax can be considered as a kind of guarantee for the completion of the real estate and accommodation system in such a way that the residents who do not declare their residence in it will be subject to the crimes of this law, which is also specified in the text of the law.
The experience of other countries in taxing empty houses
The report of the Majlis Research Center on the experience of countries shows that imposing a tax on empty houses can lead to an increase in housing supply and controlling the housing rental market, but due to the many details and complexities of this tax base, it is necessary to be careful in its design. Although this law has existed in the country since before the revolution and has been changed several times, it has not been implemented yet.
The last change of this law is related to December 2019, in this amendment, an attempt was made to resolve the basic defects of the tax law on vacant houses, which had led to its non-implementation.
The report of the Majlis Research Center states that in the design of the tax law on empty houses, due to the many factors affecting the house remaining empty, it is necessary to act in such a way that the consumer demand is completely exempt from this law and the payment of the tax, and the considered indicators should be well suited to identify These types of houses work. Two of the most important factors are second (secondary) residences and houses that are not rented despite being put on the market and due to the depressed market conditions. For this reason, these two cases have been excluded in the text of the law approved in 2019.
The report mentions another point about the tax on empty houses, its rate, and adds that it is necessary to set the rate in such a way that it is more economical to rent a house than to keep it empty. Usually, in most of the surveyed countries, this rate is between 2 and 10 percent of the property value, although in some cases it is determined based on the rental rate.
The effects of increasing the tax rate on vacant houses
The increase in the rate of this tax in the amendment of 2019 caused about 2% of the property value to be considered as a tax on empty houses in the first year (this ratio is different in different regions and cities), of course, the application of a 25% exemption from tax depreciation on Rental income for the vacant house tax doesn’t make much sense either. It is also necessary for the tax affairs organization to bring the property rental value closer to the market reality, which requires a review of the property rental value table or its systematization.
Also, one of the most important points about the tax on empty houses, which has always been one of the challenges of implementing this law, is how to identify empty houses. In this report, the experience of countries in this field was examined. Considering the conditions of the country and the lack of ownership and residential information of individuals, it seems that the first step is to complete the real estate and housing system (completion of residential information of individuals based on self-declaration and also completion of ownership information of individuals based on the information of executive bodies and self-declaration of individuals).
The completion of this system is more important than levying a tax on empty houses in the housing policy, and for this reason, the tax on empty houses can be considered as a kind of executive guarantee for the declaration of residence and ownership of people, in a way that the properties whose residence or ownership have not been declared As a rule, the house is considered empty and naturally, at the time of transfer, it is necessary to settle the tax debt related to them.
The implementation of the tax on empty houses can be a good guarantee for the completion of the real estate and accommodation system, because there are no accurate and up-to-date statistics in the country for planning the future years, and the need for this comprehensive information system in the field of housing is felt, and with self-declaration, fines and incentives All this information can be obtained from devices and people.
Completing and setting up the real estate system makes it possible to collect other taxes and identify and assign support facilities. For this reason, in the first step of the implementation of this law and in order to gradually complete this system, only the self-reported information of the people can be used as a criterion, but it is necessary to further complete this system with the guarantee of the implementations in the law.
For example, in the text of the mentioned law, one month before the end of the four-month period for the house to be empty, the Ministry of Roads and Urban Development is obliged to inform the owner that his house has been identified as an empty house. Therefore, if this house is not really empty, the owner has the opportunity to complete its residential information in the National Real Estate and Accommodation System. It is also stated in the text of the law that the executive bodies should make the main residence mentioned in the real estate and accommodation system the basis for providing services (including enrolling in school, sending identity documents, receiving bank facilities, receiving support services, etc.) that the gradual implementation of this The problem can also help to complete this system.
Where can we look for solutions to housing market problems?
Finally, it should be noted that this tax base alone cannot solve the problems of the housing market, and to control speculative demands and hoarding of land and housing, a suitable tax package should be designed in the tax field, including capital gains tax, barren land tax, and annual real estate tax. to be
The report of the Majlis Research Center also adds that some owners give up renting their property due to the risks associated with the rental operation, even with the cost of the empty house tax. The complementary solution to the vacant house tax law to deal with these people is to think about these risks and try to reduce them, and there should be changes in the laws related to tenancy, which, in addition to significantly reducing court cases related to rent, will reduce a significant part of the risks for the landlord. and make it easier for him to realize his property rights, which, along with the tax on empty houses, can also help to regulate the rental market.
Source: Irena