Real estate developer expected to boost local property market in 2019 – 2020 fiscal years as a result of a reduction in tax rates on previously undeclared income

Real estate developers in Myanmar are expecting a boost in the number of property transactions in fiscal 2019-20, which they hope will help jumpstart the local property market.

One reason demand will rise is as a result of a reduction in tax rates on previously undeclared income, which is expected to encourage those who have not declared all their income in the past to do so.

This should bring liquidity back into the formal economy, leading to opportunities for investors to channel their money into real estate at a time when supply in Yangon and other major cities in Myanmar has spiked with more completed units now on the market.

It will also encourage existing home owners who had purchased properties under different names in the past to officially correct or update any ownership details for future tax purposes.

According to new regulations approved for fiscal 2019-20, undeclared income of up to K100 million will be taxed at a rate as low as 3 percent. The rate subsequently rises to 5pc for undeclared income ranging between K100 million and K300 million, 10pc for income ranging between K300 million and K3 billion and 30pc for income above K3 billion.

In the previous fiscal year, the tax rates on undeclared income were much higher, ranging between 15pc and 30pc.  

To qualify for the lower tax rates this fiscal year, all the income declared must be invested in business or capital goods such as property.

(The Myanmar Times: https://www.mmtimes.com/news/lower-tax-rates-higher-liquidity-expected-boost-property-market.html )

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