The abnormality of the housing market continues – Tejaratnews

According to Tejarat News, Farshid Ilati, an expert in housing economics, emphasized that we have a very good housing production capacity in the country and said: the production sector of the country is fed by the land and housing market, the other side has received good facilities for the production sector (industry) and says With these fluctuations, it does not earn much, so it brings financial resources into the housing market.

He continued: The housing market must have a reasonable profit; But if some people are looking for unusual profits, the disorder in this sector should be prevented by means of taxes.

Production profit is not comparable with land and housing market profit

He stated that “currently there is a disturbance in the country’s economy”, and added: Now the production profit is not comparable with the profit of the land and housing market. In this situation, some people are looking to increase the tax exemptions of the land and housing sector!

Reminding that “the tax on empty houses is now wasted”, he explained: Today, it costs the owner of his house to keep it empty. So far, tax forms have been issued for about 66,000 residential units, and the estimated tax income from this place is 1,400 to 1,500 billion tomans.

A housing economics expert said: This income means paying taxes for each empty house annually is less than 23 million Tomans!

Ilati added: If this property is hoarded, which the law has allowed by paying 23 million tomans, after a few years, the owner will get a lot of profit.

Emphasizing that “we have problems with the difficulty of identifying empty houses and the real estate system”, he added: We say that the tax rate should be set at 30% of the value of the property, which means that if an empty house is found, the owner must pay 30% of its value in the first year and pay almost 100% of the value of the housing unit to the government if it is vacant for 3 years.

Pointing out that this 30% is not included in the law, he said: If a person buys a property and sells it within 6 months, he must pay 100% of the profit to the government for taxes, for example, today he bought a residential unit for 100 million. and in less than 6 months they sell it at a price of 150 million tomans, 50 million tomans of interest must be paid to the government as a tax, that is, the total amount of the difference between the purchase and sale.

He stated that it is the best case that if a property is sold between 6 months and one year after purchase, the tax is calculated differently, and clarified: For example, if a property is sold 8 months after purchase, the owner must pay 90% of the resulting profit. to give

A housing economics expert, recalling the report of the Islamic Council Research Center regarding the country’s experience in receiving taxes on empty houses, said: According to the published table, as the distance between buying and selling increases, the tax will decrease by the same amount, but today it is still being spent. that the house remains empty; For example, a house in Tehran was bought for 4 billion tomans and it is one of the empty houses, the same unit becomes 50% more expensive in one year, that is, 2 billion tomans, the tax of 23 million tomans is not a figure compared to this profit.

At the same time, Ilati added: But if the entire profit is to be collected from the owner for taxes, no owner will keep his house empty and enter this game.

In response to the question why there is so much resistance to receive taxes from the land and housing sector, he stated: We have had an era of feudalism and we are still landowners in Iran, which means that the principle of production and entrepreneurship has not been formed in the real sense in the country. Some countries like South Korea started the industrial period at the same time as us; Now look at where they are in the production sector and where we are, of course, part of the reason for this gap was the sanctions.

Competing land and housing have been produced

He emphasized: America cannot embargo Iran’s housing market, but we have created conditions so that no one pursues housing production. Land and housing are produced by competitors and we cannot achieve high growth until this situation is maintained.

He reminded: We have been involved in the discussion of tax on housing capital gains for about 15 years, but there are resistances that the attractiveness of the housing market will remain. The income from the land and housing sector is so high that waiting for permits is affordable.

Emphasizing that housing interest should be adjusted in a way that it becomes like other sectors of the country’s production, he added: a wrong policy has been implemented in empty houses; For example, a doctor works in another province, but has several residential units in Tehran! Why? Because the profit of this sector is high.

He added: MPs have an argument about empty houses; they say, “We want to go to a certain city, we can’t always rent, we have to have a house.”, that is, a secondary residence, I wish we didn’t have the tax on empty houses with this situation. We have so many empty houses in Tehran and Mr. Doctor comes and goes to the capital several days a month.

Earlier, the housing economics expert, referring to the capital gains tax law, said: In this field, there are two perspectives, regulatory and revenue, it is always announced that the government seeks to regulate the market and not seek to generate income, in this case, there are two ways to achieve the goal of regulation. Yes, we should increase the tax exemptions so that it affects a small number, the second way is to increase the tax amount.

Ilati added: According to the law, a person with 4 residential units is not subject to income tax payment, this of course has a condition, a large exemption for the target community is lower but with a high rate. It’s true that few are taxed, but it makes unproductive investors hot for the housing market.

He emphasized: At the same time, 80% tax on the value of housing capital gains should be collected, while the rate of 35% tax on housing capital gains (for units that are sold under 3 years) is applied. An interesting point to note is that for this 35%, the rate of “inflation adjustment” should be applied, which according to the country’s annual inflation, the capital gains tax becomes zero percent!

The housing economics expert further reminded that the Council of Expediency says that non-commercial persons in free zones should be exempted from paying taxes and added: For example, Kish Island is a place for investment and not for consumption. We have many empty residential units in this island that are in the hands of investors and traders, they say that they should be exempted due to the attraction of capital. Capital attraction should be in production, not hoarding residential units.

Stating that investments should go towards production plans, Ilati reminded: In 1987, the first report on capital gains tax was published by the Science and Industry Studies Center, even before the Research Center of the Islamic Council. We have been fighting for about 16 years to enter the tax base of the housing sector with the correct number.

Ilati further pointed out that some officials of the previous government stonewalled the tax on the housing sector and said: In 2013, the then Minister of Roads and Urban Development in a letter to the Speaker of the Parliament requested to stop the implementation of the tax on empty houses.

In response to why the former Minister of Roads and Urban Development did this, he said: In the mentioned letter, it was claimed that by levying taxes, investment in the housing sector will be disturbed, the fact is that housing is a profitable industry. This sector is profitable under normal conditions, of course, if the builders are looking for a reasonable profit.

Stating that producers are currently involved with taxes, various departments, environment, etc., he stated: If the producer takes his capital to the land sector and leaves it unused, this profit is several times the profit of production in the country. This will destroy the incentive to produce, if we want to continue as before in the housing sector.

A housing expert said: Some producers take the facilities they receive in the name of production to the housing sector, and the production sector feeds from this sector. The argument of such producers is the fluctuations of the production sector and its problems.

Source: Tasnim