Majlis approves double-urgency plan of vacancy tax law

July 12, 2020 - 15:44

TEHRAN- Iranian parliament (Majlis) on Sunday approves the double-urgency plan of the vacancy tax law, IRNA reported.

The mentioned plan is mainly aimed at lowering the housing rental rate in the country.

Expressing his agreement over the approval of the mentioned plan, Hossein Hossein-Zadeh Bahraini, a member of the Majlis Economic Committee, said, “Our problem in the housing sector is not the demand higher than the supply, while the number of residential units is more than required.”

This plan is vital, as many families are struggling for renting the homes, while there are many empty units, the MP further reiterated.

The vacancy tax law, as part of Direct Tax Reform Law, was put on the agenda in the Iranian calendar year ending March 2016 and was enforceable from the year ending March 2017, but there was little data on the number of vacant units then, according to Mahmoud Alizadeh, a senior official with Iran National Tax Administration (INTA).

Alizadeh said, “As per Clause 54 of Direct Tax Law if a home remains vacant for more than a year, it will be subject to Vacancy Tax. Homes with a floor area of 150-odd square meters will be subject to tax at the rate of 20 percent of the property’s rent value,” Eghtesad Online published on June 20.

Elaborating on the vacancy tax, INTA Head Omid-Ali Parsa said last month, “Empty homes will not be taxed in the first year but they will be taxed at the rate of 50 percent of the property’s assessed rent in the second year and in the third year, they will be levied tax at the rate of 100 percent of the assessed rent”.

According to Mahmoud Mahmoudzadeh, the head of the Housing Economy Department at the Ministry of Transport and Urban Development, a total of 6.6 million households or 30.7 percent of the country’s 18.1 million urban households in the country live in rented homes.  

Noting that the objective of the empty home tax is to return empty properties or second homes [under-used properties] as rental homes, the official said latest figures by the Statistical Center of Iran (SCI) show more than 2.1 million homes in urban areas are empty while there are about two million second home-owners. 

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