Dr. Mohsen Tabatabaei Mozd Abadi

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Dr. Mohsen Tabatabaei Mozd Abadi

Collecting tax from vacant houses does not solve all the problems of housing market

Sunday, April 24, 2016 10:01 AM
economy
شماره خبر: 189811

The secretary of IUESA believes that collecting tax from vacant houses does not solve all the problems of housing market

Regarding the government’s plan for collecting tax from vacant houses and they are counted as resources set aside from production cycle of wealth in economy and a kind of hoarding, Tabatabaei said, there are about 1.6 million empty houses in the country, according to the statistics. Global experiences help us to enter these houses to the market. Generally, these policies are based on involving government via market mechanism and using tax tools.

Tax on vacant houses is a policy that governments use for increasing costs, reducing hoarding attitude of house holders, making profit by increasing house cost and providing house for low-income people.

For instance, considering daily fines in Spain for vacant houses which they increase in the following years, tax on vacant house on the basis of a percentage of property value in the U.S, and increasing tax on the basis of being empty are the examples of collecting tax in the developed countries.

The policy of collecting tax on vacant houses is not a new debate. It was proposed in the early years after Islamic Revolution, but it was not taken seriously and it was forgotten. Until, in the 2000s and after housing sector’s developments in the country, it was proposed again in the Parliament, Department of Housing and Urban Development, Ministry of Economic Affairs and Finance, and even municipalities.

One of the serious measures was the obligation of the Ministry of Economic Affairs and Finance to collect tax on empty houses with the help of municipalities and it was decided to share the revenue from taxation between municipalities and the Ministry of Economic Affairs and Finance in order to take an important step toward increasing the share of municipalities’ sustainable revenues.

 This plan was not approved and finally after some measures in this regard, an article was considered for empty houses; residential units in cities with more than 100000 population is identified as “empty unit” according to the national system of housing and property of country. In the second and third years onwards, respectively subject to 1/2 accrued tax, 100% of accrued tax and from the fourth year onwards is subject to 1.5 accrued taxes.

It is expected that marginal profit of keeping empty the vacant units especially in large cities and after relative stability in housing prices will decrease and some of those houses supply to the housing market.

Source : ISNA news agency

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