Tax on capital gains and reducing speculation in the housing market – Tejaratnews
According to Tejarat News, Javad Eskandari, an economic expert of the Majlis Research Center, said about capital gains tax: First, it should be noted that with the imposition of capital gains tax, frequent buying and selling or speculative demand for housing in the country, which is one of the factors that increase housing prices in the country is, will decrease. Also, the exemption of the stock market will attract another part of liquidity, and therefore part of the speculative motives will be transferred to this part.
In response to the question of what types of assets are subject to the tax on capital gains, he added: The assets subject to this tax include properties with various types of use and the right to assign the premises, types of vehicles subject to numbering regulations, types of gold, silver, and platinum. , gold, silver, platinum, jewelry and currency.
Objectives of receiving tax from capital gains
This economic expert explained in relation to the objectives of the parliament and the government in approving this type of tax: In general, the plan of the parliament was not written based on revenue logic and was prepared and compiled with the aim of regulating and controlling the markets and preventing destructive and non-transparent speculations. . The extensive exemptions foreseen in the plan, such as the exemption of persons up to the number of family members and the exemption of newly built properties, as well as the adjustment of inflation in the calculation of capital gains tax for assets that are held for more than 3 years, by 50% and for assets that are held for more than 6 years 100% income from inflation is proof of this claim.
Regarding the effect of capital gains tax on the market and housing prices (increase, decrease and neutral), Eskandari added: There are two important points in this regard; First, by imposing capital gains tax on the frequent buying and selling of housing in the country, “speculative demand” which is one of the factors of increasing housing prices in the country will be reduced. Also, the exemption of the stock market will attract another part of liquidity, and therefore part of the speculative motives will be transferred to this part.
Second, the tax-free supply of surplus properties and vehicles of individuals during the initial 4-year period of law enforcement increases the supply of these assets and lowers their prices in the market. Also, the exemption from the sale of newly built properties and the allocation of tax revenues from the purchase and sale of properties according to the law to the same field, i.e. the development of housing production in the country, will improve the prosperity of this market, and the imposition of this type of tax will improve public welfare. .
Capital gains tax exemptions
He enumerated the capital gains tax exemptions and said: the logic governing the capital gains tax is the tax on assets in excess of the consumption needs of individuals; Therefore, individuals will be subject to tax regarding assets in excess of consumption needs, on which repeated purchases and sales are made.
This economic expert admitted: According to the text of the report of the Economic Commission, firstly, individuals are exempted according to the number of their family members, therefore, each person is exempt from tax up to the number of his wife and children, as well as other dependent members up to 4 vehicles and 4 residential properties. . Also, that part of the income of individuals that is the result of the economic activity of individuals is not subject to capital gains tax, and the income derived from the economic activity of commercial entities is discussed in the chapter on the income tax of the mentioned individuals, and it has nothing to do with the capital gains tax of non-commercial entities. .
Eskandari stated: Second, considering that every household usually uses gold and jewelry to some extent, an exemption has been seen in this plan for not including this consumption requirement; This exemption is for each person (male or female) up to the threshold of 200 grams of 18 carat gold, provided that this exemption has not been used by the mentioned persons in the last 5 years. The point that should be emphasized here is that considering that the size of the household in the country is almost 3 people, therefore, it can be said that the mentioned exemption is equivalent to 600 grams of 18-carat gold for a family of three with the mentioned conditions. It is significant and in a way, every 5 years it is equivalent to 600 grams of 18 carat gold that can be sold tax-free.
He emphasized: Thirdly, inflation adjustment is included in the calculation of capital gains tax for assets that are bought and sold in the medium and long term. If people keep their surplus assets for more than 3 years, 50% and if they keep it for more than 6 years, 100% of the income from inflation will be deducted from their total income, and therefore, people even regarding their surplus assets that were bought for the purpose of speculation are not taxed in any way; Because a significant part of their income, which is deducted from their total income due to inflation, and therefore individuals are not taxed in any way, even regarding their surplus assets that were not purchased for the purpose of speculation; Because a significant part of their income, which is the result of inflation, has been deducted from the tax source, and only that part of the price increase that occurred due to the development of infrastructure such as road development, subway construction, bridge construction, etc. will be taxed.
Preparation of infrastructure platforms
The expert of the Majlis Research Center acknowledged whether the necessary platform for the implementation of this plan has been provided: the issue of lack of executive infrastructure is exactly the problem that was in the initial version of the plan on capital gains tax and for this reason the plan was returned to the commission and in The second report of Shore this problem was solved by adding the “executable platform” section.
In the section of the executive platform, which has been given a legal deadline of almost two years for the provision of infrastructure to the relevant institutions, it has been specified that if the aforementioned executive infrastructure is not provided, the tax affairs organization is not allowed to levy tax on capital gains. Therefore, due to the fact that the executive platform is based on the successful experience of other countries and based on the conditions, facilities and general culture of the countries, and it includes almost half of the plan, there is no concern about the executive infrastructure.
To read more, refer to Tejaratnews housing page.