Government officials say they are planning to introduce additional real estate transaction taxes to cool the overheated the sector.
The statements follow announcements in state media last week that a tax on real estate transactions will not be lowered from its current 37 percent, despite industry pressure.
Deputy Minister of Finance Maung Maung Thein said at a press event in Nay Pyi Taw on Friday that government officials are looking at ways of collecting tax based on square footage of property.
“We have [internally] proposed tax prices for land in the Yangon region, and are looking at rates for the entire country. We will make an announcement soon,” he said.
Hiking property transaction taxes will help reign in land prices and also generate revenue for state coffers, he said, adding his ministry collected K26.1 billion in income tax during June and July.
In August 2012 the government axed a five-year property tax holiday, bringing into effect a 30pc transaction tax and 7pc stamp tax to be paid by the buyer. The real estate sector was rife with rumours the tax would be reduced this year, but last week’s reports in state media such speculation.
U Yan Aung, general manager of Sai Khaung Noung real estate and law firm in Yangon’s Tamwe township, said last week’s announcement had already cooled the market. “The market has been a bit sluggish because of the [propsed] transaction tax,” he said.
U Soe Thein, a minister at the President’s Office, said on Friday high and unpredictable prices in the real estate market are hindering development.
“People are getting into trouble because of those tricky land prices,” he said.U Soe Thein pointed to land speculation in Dala township as an example of a runaway market.
Talk of a Korean-funded bridge from Yangon to Dala sparked a surge in prices in the township recently, he said, adding that speculators rushed to buy land that was currently accessible only by ferry from the city centre.
“No one can confirm that the project will proceed at present,” he said.
“The bridge might be 30 years away,” U Soe Thein added.
Source: Myanmar Times