It was reported earlier today by Live Trading News that the government of Burma has readjusted the tax rate on real estate sales by increasing the rate to 22 percent of the value of the overall deal. The adjustments will come after a provisional measure put in place to reduce the tax had remained unchanged for five years since August of 2007.
Buyers who fail to declare the source of income for property purchases made are now set to pay 37 percent tax on deals instead of the previous 15 percent introduced in 2007. The change has sparked fears by some that the rate could creep back up to the 50 percent mark which was prescribed in 1976.
The increase of the tax rate will certainly be a burden for buyers, prompting real estate agencies to predict that real estate prices could fall slightly after purchasing power drops. Estate dealers have said that they would closely monitor any developments for at least six months to see if there could be a potential return to business.
The rate of 15 percent tax which was introduced in 2007 was applicable to be paid on purchases up to the value of MMK500 million (US$574,700), with a rate of 12 percent applicable to deals of a higher value.
The Burmese real estate market experienced a revival in late 2007, with prices growing steadily since then. The prices of land plots, apartments and other residential properties lying in the commercial centre of the Yangon downtown area have risen sixfold in the course of the last five years.