There are an estimated a million empty properties in the country, head of the National Tax Administration said at the weekend as reported by the official website of the Ministry of Economic Affairs and Finance.
“In Tehran alone there are over 400,000 vacant houses that have not been offered to the market for sale,” Ali Askari, the head of the organization said, adding that “This is unfair to potential buyers and tenants.”
In most countries empty residences are subject to property tax, he recalled. However, “In Iran housing is normally considered as investment and people refuse to offer their empty properties to the market waiting for higher prices and fatter profits.”
On the right mechanisms to identify all the vacant houses across the country, Askari said due to the lack of an effective system of information, the total number of vacant properties cannot be determined at a the time being.
“We need to update all the necessary and relevant information related to housing before starting to tax the vacant housing units,” he said, admitting that that the national tax authority is unable to collect all the information on its own.
As municipalities are responsible for issuing permits and documents for the starging and completion of every type of construction works, he called on them to submit records of completed housing projects to tax authorities so that residential and commercial spaces could be identified without difficulty.
Depressed Market
Recent tax reforms require homeowners in cities with more than 100,000 residents to pay tax for their vacant properties. Iran’s housing industry contributes to almost 20% of the gross domestic product and employs 13% of the total working population.
Despite the fact that the local real estate (sale) market has been dull for more than three years, the controversy over empty houses and whether or not to tax their owners has persisted largely due to rising rents in the big cities.
As people take the wait and see approach before buying houses the lease market has taken an upward trend with landlords getting into the ugly habit of demanding high rents that for many are prohibitive. Market observers say the sluggishness of the home-sale market is primarily due to the overall economic conditions defined by double-digit inflation and the recession that has been around since 2013 and has reportedly gotten worse as people tend to be more careful with their money and spend less.
The banking sector is also responsible for the extended decline in the key housing market as the loans they offer is like peanuts and barely cover 5-7% of the cost of a small apartment even in the small cities and towns where prices are normally much less and people can afford a simple dwelling place.
