Rewritten Title: Iran Implements Progressive Property Tax on High-Value Real Estate in New Fiscal Year
Article:
A New Fiscal Policy for Luxury Real Estate
In a significant move within its annual budget, the Iranian government has enacted new regulations for the taxation of high-value properties. Effective from the start of the current Iranian fiscal year (March 2024), the law establishes a clear framework for an annual property tax targeting luxury residential and commercial holdings.
Defining the Taxable Properties
The legislation, passed under the national budget law, specifies two primary categories for taxation:
- Residential Land: Plots with residential zoning that have a transactional value exceeding 300 billion Rials (30 billion Tomans).
- Commercial & High-Value Residential Units: Commercial or administrative land without structures, along with residential units valued over 500 billion Rials (50 billion Tomans).
The tax is set at a rate of 0.2% (two per thousand) on the value that exceeds these established thresholds.
Key Provisions and Exemptions
The law includes several important clauses to define its scope and provide certain protections:
- Liability and Deadline: The tax liability falls on the owner of the property as of the start of the fiscal year. Payment is required by late January 2025.
- Exemption for Primary Residences: A key exemption protects citizens for whom the property is their primary home. Individuals who have continuously owned a single residential unit for the past ten years are exempt from this tax for properties valued up to twice the standard threshold (1,000 billion Rials).
- Exemption for Under-Construction Units: Residential units currently under construction are also temporarily exempt from this tax.
- Penalties for Unauthorized Units: The law imposes stricter penalties for unauthorized constructions, subjecting them to a fine equivalent to double the standard tax rate until they obtain the necessary permits.
Enforcement and Data Sharing
To ensure effective implementation, the National Registration and Deeds Organization is mandated to provide real-time property data to the Iranian National Tax Administration. Furthermore, the law prohibits the registration of any sale, lease, or transfer of a taxable property until its associated tax debt is cleared.
This policy represents a targeted fiscal measure, reflecting the government’s approach to economic planning and social equity within the framework of its national laws.