Budget deficit, tax hike; Raisi's government generates revenue from "luxury homes"

For the third consecutive year, the Ministry of Economic Affairs and Finance submitted a draft executive regulation for the "Luxury Homes Tax" law to the Cabinet of Ministers, with the aim of "increasing government tax revenues." If approved, the calculation of "fees and taxes on expensive residential units and garden villas" will be determined in 1401.

According to the Mehr News Agency on Monday, June 6, according to this draft, houses and villas whose value, calculated as "land and valuables," exceeds 150 billion rials will be subject to a "two-per-thousand" tax.

According to this report, individuals and legal entities are required to pay their annual property tax "no later than the end of Bahman 1401" and the transfer and even rental of properties subject to this tax has been declared "prohibited" before the tax debt is paid.

In the past two years, taxes on homes defined as "luxury" were included in the budget law as tax revenue, but were not implemented and the amount of revenue generated was "almost close to zero."

According to Ehsan Khandozi, Minister of Economic Affairs and Finance, in the second half of 1400, a regulation was approved by the Cabinet and notified to the executive agencies, but remained silent due to the "lack of implementation guarantees."

In May, Khandouzi stated in the Economic Commission of the Islamic Consultative Assembly that "we do not have the tools to collect," adding: "Currently, we cannot collect taxes from the owner of a luxury home who has been identified unless he has the intention to buy or sell and is forced to obtain a tax account reconciliation form."

According to the current draft, the annual tax on assets subject to this regulation "with a daily value of up to 15 billion tomans" is set at "one-tenth of a percent", from "15 to 25 billion tomans" at "two-tenths of a percent", from 25 to 40 billion tomans" at "three-tenths of a percent", assets with a value of "40 to 60 billion tomans" at "four-tenths of a percent" and assets in excess of "60 billion tomans" at "half a percent".

According to the price list published by "Khabar Online" on June 4, the price per square meter of a residential unit in different areas of Tehran varies from "10 million Tomans" to more than "75 million Tomans".

The 13th government of the Islamic Republic of Iran has increased taxes to compensate for the budget deficit, a policy that has been criticized for its ineffectiveness in practice.