Developers fear real estate taxes

Apartment prices could increase

Real estate developers warned that new taxes would provoke an increase in the prices of apartments. The Cabinet had adopted a series of construction-related fees and taxes to cover the expenses of the new public salary scale.

The Cabinet has set a two percent tax on property transfers. It also increased the tax on construction permits and fiscal stamps. “Developers will be charged extra costs so they will have to cover them by raising real estate prices,” said Walid Moussa, Head of PBM, a real estate brokerage firm. “This move will not only negatively affect the prices of apartments, but will also limit the flexibility of the prices offered by developers,” said Moussa.

Hassan Tajeddine, CEO of Tajco, a real estate development firm, said: “We already pay a 5.9 percent fee for registering a property and now we have to pay an additional two percent.” According to Tajeddine, developers will have to either raise apartment prices or discharge employees in order to cover their costs and achieve profits.

“Although these taxes will provide extra income to the State, they would damage one of the very few sectors that are still doing well compared to others,” Moussa said.