Realtors demand abolition of income disclosure provision

Realtors have demanded the abolition of a provision that requires individuals purchasing land worth more than Rs 2 million and houses worth more than Rs 5 million to disclose income sources.

The Nepal Land and Housing Development Association, an umbrella organization of Nepali realtors, tabled the demand during a meeting with the newly appointed finance minister, Surendra Pandey, on Sunday. The realtors have requested that the provision be abolished through the upcoming budget.

The government had made the income-disclosure provision mandatory from December last year. But after its introduction, many who were planning to buy property have found themselves in a fix. They are afraid that the government could pry and ask for their income sources whenever it wants.

All these anxieties are negatively affecting real estate transactions, Ichchha Raj Tamang, president of the association, said. "This provision is also draining the amount that the government collects through its revenue collection," he said, adding, "The finance minister is positive about our demand."

During the meeting with the finance minister, realtors also requested the introduction of a provision that allows foreigners to partly own apartments. Om Rajbhandary, managing director of Comfort Housing, said: "Although the government has barred foreigners from purchasing land in their own names in Nepal, it can at least allow them to have at least a 20 percent stake in apartments. That will boost real estate transactions and bring in more foreign investment to this sector."

Rajbhandary also recommended that the government embrace the concept of "townships" to promote the concept of planned urban development in the country. He also pushed for the introduction of regulations that makes its mandatory for real estate transactions to take place through the hands of licensed real estate agents. "This will make this sector more organized," he said.

The realtors have also requested the finance minister to create a conducive environment for banks to invest more in this sector. Their call comes at a time when the country´s central bank has labeled the real estate sector a "vulnerable" one and has requested banks to reduce their lending to this sector. "These statements have generated fear among the public that banks would eventually hesitate to invest in this sector. The government should prove these rumors false," Tamang said. Currently 13 percent of the total loans issued by banks and finance companies have gone to the real estate sector.

The realtors have also requested the government to reduce the property registration fee, which was recently doubled by the government, and to give the real estate business the recognition of an industry, as "it is generating ample employment opportunities and revenue for the state."
Source:
Myrepublica.com