Economy, Business And Markets

Realtors Say Can Dispose Mehr Housing Inventory

Despite the economic difficulties, the government managed to complete the construction of 800,000 Mehr housing units in the past three yearsDespite the economic difficulties, the government managed to complete the construction of 800,000 Mehr housing units in the past three years

Real estate agents are willing to help the government get rid of the Mehr housing inventory that have no buyers, said Hessam Oqbaei, the head of Tehran’s Association of Realtors.

“Iran’sReal Estate Union with 124,000 members, is capable of helping the government sell the unwanted units of the Mehr Housing Project and also provide funding for completing the project,” Majlis News Agency, ICANA, quoted him as saying on Tuesday.

The Mehr project is a mega home construction program initiated in 2007 by the previous administration to provide two million people with low-cost units through free land and cheap credits.

The project was facing major funding problems when the Rouhani administration took office in 2013 and has turned out to be a major quandary for the government struggling with a mountain of unending economic challenges.

Experts and estate developers say the scheme lacks proper planning and basic infrastructure.  On top of that, it is said that some 100,000 units of the scheme have no buyers because they are either built in remote areas or lack facilities needed for everyday living.

Despite the economic difficulties, the government managed to complete  the construction of 800,000 Mehr housing units in the past three years and wants to finish the remaining 2,200 units by next February, fulfilling a promise to the applicants that their quest for homeownership would not be ignored.

Oqbaei is of the opinion that the government should get over with the controversial Mehr Housing projects as soon as possible and focus on its own flagship ‘social housing plan.’ “The government should not hesitate if it has plans to finish off the Mehr Housing project.”

The framework for the Rouhani administration’s social housing plan was approved in the fiscal year that ended in March 2015. It stipulates that annually 125,000 households in the four lowest income deciles, should be added to one of three protection schemes. The new social housing plan under the government auspices will start after the costly and controversial Mehr Housing Project is completed.

 Tax on Vacant Homes

Oqbaei also pointed to the government’s plans for imposing tax on vacant housing units saying that the plan will have no significant impact on the market.

Data shows that 270,000 housing units are vacant in Tehran, while the total number of vacant homes amounts to 600,000, he said, “Some of the housing units are brand-new while others are in the upscale neighborhoods of the city with no potential buyers.”

The realtor said most owners of luxury homes are awaiting for the expected post-sanctions boom so that they can sell for a bigger profit.  “Punitive measures will not work. The government should help promote competition in the property market.”

According to a newly-enacted law, taxes from vacant property apply from the beginning of the current fiscal year in March and taxpayers must mention their empty houses when filing tax returns.

According to the law, residential units in cities with a population of over 100,000 that are identified as “empty residential premises” in the National Property Database are subject to tax after having remained vacant for two years.

Furthermore, empty units will be taxed half the prescribed rate for the second year. But homeowners will have to pay the full tax from the third year and 1.5 times the amount from the fourth year onward.

The new tax scheme was designed specifically to discourage investors and people from adopting a ‘buy and hold’ approach to residential units – a sector that has a 38% share in the economy.



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