Rent law would generate
$1.2 billion to Treasury
Its amendment would reduce revenues to $960 million
The State’s revenues from the Built-Up Property Tax on long leased buildings are expected to reach $1.2 billion, once the new rent law is fully implemented over the next six years, according to official estimates. The concerned long leased buildings are those with rent control, the amounts of which have not changed since 1992.
“The initial estimations of the Treasury’s income from gradually raising the rent prices is $1.2 billion,” said Member of Parliament Samir Jisr, who is on the subcommittee that is modifying the new rent law.
“Landlords of old leased buildings currently pay only around $27 million a year to the State, in taxes,” said Joseph Zougheib, Chairman of the Syndicate of Landlords of Leased Buildings.
The estimated $1.2 billion in revenues would be the result of the increase in the value of the lease, which will lead to an equivalent increase paid by landlords in Built-Up Property Taxes, which are property taxes owed annually by landlords to the Ministry of Finance (MoF).
The new rent law is still the subject of dispute between long term landlords and their tenants, due to a disagreement over the stipulation that rent should rise by 15 percent annually, until it represents five percent of the property value, over the next six years. Tenants would then have to commit to paying rents set by the landlords. If not, landlords would have the right to take possession of the house, without paying them any compensation.
The Parliamentary Justice and Administration Committee had recently concluded amendments to the disputed rent law. The first amendment consisted of reducing the rental value of the property from five to four percent of its overall value.
The one percent decrease in the rental value would decrease the estimated Treasury’s income of $1.2 billion to $960 million.
Reported by Yassmine Alieh
Date Posted: May 04, 2015