EghtesadOnline: The Guardians Council–a watchdog that ensures laws are in line with the Iranian Constitution and Islamic law—has approved the parliament’s bill on revisions to Article 54 of Direct Tax Code, i.e., vacancy tax.
Abbasali Kadkhodaei, the council spokesman, tweeted that the parliament’s revised proposal on taxing empty homes was not found to be in violation of Islamic law and the Iranian Constitution in a Wednesday meeting.
The Iranian Parliament approved the proposal on August 5, based on which empty homes in cities with a population of over 100,000 will be taxed after four months based on their assessed rental income tax on a monthly basis.
The owners of these properties will have to pay six times more than the rental income tax in the first year, 12 times more than the rental income tax in the second year and 18 times more than the rental income tax in the third year and the following years.
The final approval came after the council returned the vacancy tax bill to the Majlis on August 12, citing "ambiguities" and called for amendments.
The government estimates 7,070 billion rials ($27.19 million) in revenues from the taxation of luxury homes as per the budget bill for the next fiscal year (March 2021-22).
It has also projected an income of 2,000 billion rials ($7.69 million) from vacancy tax (tax on empty homes), Mehr News Agency reported.
Notably, the government had included income from taxation of luxury homes and cars in the Budget Law for the current year (started March 20), but nearly nine months into the year, the so-called executive bylaw of which (the decree stating measures for the enforcement of a law) has yet to be drafted.
Vice President for Parliamentary Affairs Hosseinali Amiri recently submitted the budget bill for the next on Wednesday.
In the next fiscal year (to start March 21, 2021), the operating budget (including revenues derived mainly from taxation and exports at the disposal of the government) has been projected to stand at 8,413 trillion rials ($33.65 billion at the market exchange rate of 250,000 rials per US dollar).
Add to this, revenues earmarked for ministries and governmental institutions worth 884 trillion rials ($3.53 billion) take the total sum of the general budget to 9,298 trillion rials ($37.19 billion).
The budget of state companies, banks and for-profit organizations has been put at 15,619 trillion rials ($62.47 billion).
All in all, the ceiling set for the government’s total budget is at 24,357 trillion rials ($97.42 billion).
According to the Housing Comprehensive Plan (March 2017-27) drafted by the Ministry of Roads and Urban Development, the Iranian population will reach 88.2 million in the year ending March 2027. Projections show that by then, 68.2 million would be living in urban areas and 20 million in rural areas. The number of households will hit 28.7 million, of whom 22.1 million will inhabit cities and 6.15 million will be living in villages.
Newly-formed families will need 4,076,000 homes over 10 years to March 2027 (including 3,997,000 urban households and 79,000 rural households). The country will be short of 1,370,000 homes (including 673,000 units in cities and 697,000 in villages). A total of 5,313,000 homes, including 3,003,000 in the cities and 2,310,000 in villages have to be repaired or rebuilt by then.
From the Iranian year ending March 2007 to the year ending March 2017, close to 590,000 residential units were produced and supplied to the market. The highest and lowest number of homes constructed over these years were registered for the year ending March 2013 with 820,000 and the year ending March 2017 with 390,000, respectively.
About 2.5 million homes in the country are empty. The optimal ratio of vacant house is 5% in urban areas and 2.5% in rural areas whereas it is 10.3% in Iran’s urban areas and 8.5% in rural areas.
The Housing Comprehensive Plan estimates the number of vacant homes to decline to 1.4 million (1.1 million in urban areas and 300,000 in rural areas.)