Budget Deficit, Tax Increases; Raisi Government Generates Revenue from ‘Luxury Homes’
The Ministry of Economic Affairs and Finance submitted a draft executive regulation of the “luxury homes tax” law to the cabinet for the third consecutive year, aiming to “increase government tax revenues.” If approved, the calculation of “fees and taxes on expensive residential units and villas” will be determined in 1401.
According to Mehr News Agency report on Monday, June 7, 1400, based on this draft, homes and villas whose value, calculated by “land and structures,” exceeds 150 billion rials will be subject to a “two per thousand” tax.
According to the report, real and legal persons are obligated to “pay the annual property tax of their properties by the end of February 1402,” and the transfer, sale, and even rental of properties subject to this tax have been declared “prohibited” before paying the tax debt.
In the past two years, taxes on homes defined as “luxury” were also considered as tax revenue in the budget law, but were not implemented, and the amount of revenue generated from it was “nearly zero.”
According to Ehsan Khandouzi, Minister of Economic Affairs and Finance, in the second half of 1400, a regulation was approved by the government cabinet and circulated to executive agencies, but remained dormant due to “lack of enforcement guarantees.”
Khandouzi stated in Ordibehesht in the economic commission of the Islamic Consultative Assembly, saying “we have no tools for collection,” and added: “Currently, unless the owner of an identified luxury home intends to buy and sell and is forced to obtain a tax clearance certificate, we cannot collect taxes from them.”
Based on the current draft, the annual tax on assets covered by this regulation is: “with a value up to 15 billion tomans” includes “one tenth of a percent,” from “15 to 25 billion tomans” includes “two tenths of a percent,” from “25 to 40 billion tomans” includes “three tenths of a percent,” assets valued “40 to 60 billion tomans” equivalent to “four tenths of a percent,” and exceeding “60 billion tomans” includes “half a percent.”
Based on a price list published by “Khabar Online” on June 5, 1400, the price per square meter of residential units in different areas of Tehran varies from “10 million tomans” to over “75 million tomans.”
The thirteenth government of the Islamic Republic of Iran has resorted to increasing taxes to compensate for the budget deficit. A policy whose ineffectiveness in practice has been criticized.
