Economy, Business And Markets

Real Estate Database to Reduce Tax Evasion

Real Estate Database to Reduce Tax Evasion Real Estate Database to Reduce Tax Evasion

Ministry of Roads and Urban Development is developing a comprehensive, nationwide database of all residential units across the country which will include information about owners. The move is planned to create a platform for the government to impose taxes on vacant homes.

“The database would help us identify how many houses are owned by each person and whether they are occupied or vacant, so that owners would be taxed either on their rents they collect or their vacant homes,” said Ali Chegini, head of Housing Economy Department at the ministry on Sunday.

According to a new law, the collection of taxes from empty property applies from the beginning of the current fiscal year that started in March and taxpayers must report their empty property when filing tax returns.

 “The data would be handed to the Ministry of Economic Affairs and Finance, and is designed to help prevent tax evasion,” the ministry’s website quoted him as saying.  

The database is being developed in accordance with the regulations and in collaboration with several organizations.

 Levying taxes on houses is an appropriate method for controlling speculative activities in the property market, the official said. “Maintaining stability in the housing market and at the same helping other markets grow should be helpful.”

The official noted that the ministry has suggested levying taxes on real estate filliping, which has not been finalized yet.

 “The new plan would charge higher taxes on such deals,” he said. “However, we need to develop a proper computation method, since the high rate of inflation in Iran would make the process more complicated.”

For years economists and experts have been pushing governments to declare vacant homes taxable to help ease the mounting pressure on first-time homebuyers and those wanting to lease a dwelling place in the visibly prohibitive Tehran property market where sky is the limit.

However, some analysts warn that the scheme is not feasible and that it could trigger an outflow of capital from the key housing sector.  A parliamentary research into the issue estimates that some 1.66 million homes are vacant in the country, 312,000 of which are in Tehran alone.