Showerthought: They should tax investment properties that remain vacant with no tenants.

problems I've seen is people buying property off plan for too much money, then when the project is finished investors overprice the rent, even if it is over market value, and would prefer an empty property over lowering the price.

I myself gave reasonable offers on property last January (2017) that are unbelievably still empty. They missed a whole year's rent because they wouldn't negotiate a reasonable price.

This artificially inflates the rental market and is causing big problems with regards to housing affordability for the working class.

Why not just tax investment properties after a certain period of having no lease agreement? This will put an economic incentive on investors to make housing more affordable. Either pay tax, or lower your rental expectations to come in line with supply and demand.

I still find it crazy that middle-class workers with good jobs (let's say 10k/ month) cannot reasonably afford their own decent housing in this city.

Dubai | 👁 1180 | Posted April 18, 2018 | Share on Facebook | Twitter | Google+

| Modified: April 18, 2018 | Author:


wazaaaaaaa 2 years ago

money laundering

theantnest 2 years ago

Especially when you get exactly nothing in return for it.

theantnest 2 years ago

Thanks. I completely agree. I think there are a few of those morons commenting and voting in this discussion hahahahaha

macdeez 2 years ago

Would you mind elaborating on why it would have this effect?

Seccour 2 years ago

Taxation is theft.

PittyParra 2 years ago

Background: I work in RE here in Dubai but focused more on asset acquisition for Private Investment Funds, REITs, and local/international investors. However, clients that I've built long term relationships with still call me to rent or sell their properties. I tell them very directly the current state of the market, and that it is no longer the super high yielding market it once was. (Investors were spoiled back in the day.) If they don't agree with me and accept that, than I don't bother with that property. Usually they call me 2 months later begging to rent it or sell it. Everyone has a different investment strategy, however it should normally be seen as a 3-5+ year plan in any market. To the comment about having rent cover the mortgage. Always better to be positive cash flow but it doesn't always work out that way. Sometimes this is not the case, better to have someone paying 85% of your costs compared to dreaming about a rental offer that might never come. A lot of landlords here are actual morons and would rather lose out on months of rental income than drop the price 10k-30k. Either these are the filthy rich that can afford vacancy costs or the dumbass investors that over leveraged and need every dirham. The smart investor will adapt to the market and either renegotiate with their current tenant or drop the price accordingly.

nartiz 2 years ago

The man decided it's the reasonable So someone must force the Owner to lower it's price !

theantnest 2 years ago Median American household income (with 2 earners) is 57000USD But yes you are correct, it is semantics.

yopla 2 years ago

Which they do for the most part.

yopla 2 years ago

In 2005, sociologists William Thompson and Joseph Hickey estimate an income range of roughly$35,000to$75,000for the lower middle class and$100,000or more for the upper middle class. 10k AED a month is below what is generally accepted as the lower end of the lower middle class in developped countries. That said it's just semantic, whatever is the salary people should be able to afford a decent accomodation. Your idea is interesting. But they might scare foreign investor with that kind of law

biteyourankles 2 years ago

I think you might need to have an Ejari registration as well as Dewa activated for the Tax to kick in since its on your facilities bill

biteyourankles 2 years ago

But how will they launder that money? We aren't going to attract the Hyper-wealthy by 2026 with ideas like this.

theantnest 2 years ago

My solution was capitalist. People can still choose how they price their property, just there is economic incentive to price it properly.

theantnest 2 years ago

The government owns large shares in development companies, so the moment they sold everything off-plan, they make good returns Agreed, and this is a very short-sighted approach. This is basically the source of the overpriced rental market.

theantnest 2 years ago

So zero is better than not enough to cover your poorly thought out investment. Got it.

theantnest 2 years ago

For certain it would bring property prices down to reasonable. The thing is, to have a prospering economy you need people to be able to afford a reasonable standard of living. Many people like myself are leaving. I predict that after 2020 Dubai will only have the people who don't have any other choice remaining, with most of the other expats gone.

theantnest 2 years ago

15k a month offer on a 17k per month villa that needed a LOT of work. The pool and garden area was in a bad state with no grass or plants alive and the pool with 20cm of green sludge left in it, and I offered to pay less and fix it all ourselves. They rejected the offer. The villa is still empty a year later.

anotherdxbguy 2 years ago

The government already charges a 5% housing tax, right?

Logico__ 2 years ago

I think the problem here is your definition of "reasonable". If the offer were reasonable to THEM, they would have accepted it

tmThEMaN 2 years ago

Thats rich people out of home partying

gw3gon 2 years ago

No. We if they lose out on a year's rent, then that is on them.

Fletch1975 2 years ago

Isnt the problem that if they lower their price and took your offer, then they would have a tenant paying a lot less than they wanted them to. Perhaps less than the mortgage. Then how would you feel if six months down the line they put the rent up? They were probably trying to get someone in and thought it was worth hanging on. Sounds like nobody came forward, but they probably thought it was worth waiting. We have a property in London and there is a bottom price that we can rent it out for otherwise it wont cover the mortgage. We are also paying mortgage on the place we live in.

thekrushr 2 years ago

10K per month (c. 33K USD p.a.) after tax will be a very good salary anywhere but here In many parts of the world yes, but certainly not "anywhere but here." Where I'm from that would be near the poverty line.

ItsBlackRedGold 2 years ago

I don't think the government sees a need to tax. Let's face it, there is a lot of construction going on, and the construction is feasible because units are sold off-plan. The government owns large shares in development companies, so the moment they sold everything off-plan, they make good returns. Development companies then charge landlords an annual fee, so there is a steady stream of income. Why mess with that and maybe scare off potential investors through a possible tax on something they already pay annual fees for?

burksterdxb 2 years ago

On that note, hotels and airlines should sell vacant rooms and seats at dirt cheap prices. Kthxbai PS. I'm just trolling

jony_86 2 years ago

take a close look at night at any building in good locations. You will notice many lights are off.. I am talking entire floors. They prefer to keep vacant because they have no choice. The market seems like it is controlled by a few and once somebody lowers the prices it will take a toll on the hole real estate market so they don't do it. They'd rather wait till the plebs have enough money to pay the mortgage or rent.

Razzler1973 2 years ago

which is where a lot of locals make a lot of money ... therefore nothing is changing

malnad_gowda 2 years ago

But isn't that the difference between capitalism and socialism ?

investaquest 2 years ago

Unlike Vancouver where there is an actual shortage, this would have a horrible effect on the property market here (which is where a lot of locals make a lot of money).

Post your Comments