Real estate agents have been asked to watch out for attempts to launder money through the property sector and to avoid selling to foreigners or speculators.
The Myanmar Real Estate Services Association (MRESA) recently met with international anti-money laundering organisations to discuss the ill-gotten funds that are reportedly laundered through the property sector, said U Than Oo, vice chair of the industry body.
“We are warning real estate agents to stay away from transactions involving money laundering,” he said.
Last August, the Financial Intelligence Unit (FIU) which was set up to combat money laundering, asked estate agents to report all sales worth more than K100 million.
According to Myanmar law, any real estate transaction is legal as long as the buyer pays 30 percent tax. A new anti-money laundering law is still at the draft stage.
MRESA, which is affiliated with the business organisation UMFCCI, has also been educating real estate agents about the dangers of market speculation and advising them to avoid running this type of transaction, said U Than Oo.
Also, he said, MRESA has told estate agents to watch out for foreigners speculating on property under the names of Myanmar people. In Myanmar it is illegal for foreigners to own property.
Foreigners have reportedly sidestepped the law by buying through nominees, according to lawyers. A simple nominee contract is illegal, but a more complex deal is possible, as long as it does not break the Transfer of Immovable Property Law, and as long as the documents don’t convey an interest in real estate, said a Yangon-based lawyer.
This option has been very popular among investors looking to come into the market, buy property and flip it, but some of this demand has dropped, as it becomes harder to buy and sell ahead of the forthcoming elections, said the lawyer.
Myanmar people and estate agents have known about foreign buyers for a long time, said U Than Oo, adding that the government is also aware of the problem due to media coverage, but has not yet taken decisive action. Another concern is that false rumours are hurting market confidence, he said. “There were rumours that the tax rate would be cut. So I asked in the tax office – it’s not true,” he said.
Due to false rumours, real estate transactions are few and far between, said real estate agents. “We hardly hear about any property transactions because of various rumours,” said Daw Nilar Kyaw, who runs Aye Yeik San real estate agency.
Speculators have tried to kick the market into life in various ways, including trying to sell land to the west of Yangon that was recently tendered for redevelopment. However, they have struggled to find buyers, according to developers and real estate agents.
“There is no one to buy even if the market is forcibly stimulated, due to a number of other reasons,” said U Ko Ko Htwe, chair of Taw Win Family Construction Company.
Among these, the market is quiet because investors are waiting for the results of the November election, he said.
Source: Myanmar Times