Hefty fees, taxes will harm Bahrain's realty sector: Expert
Manama : Hefty government fees, high taxes and high interest rates in the real estate sector could have disastrous consequences for the domestic economy, said international property specialist Eman Al Mannai yesterday.
Long-term economic implications must be carefully studied before introducing any law that impacts the real estate sector, the prominent real estate expert opined.
Bahrain’s real estate sector has been resilient throughout the economic slowdown in spite of the oil price crash, she said. However, if hefty taxes and fees are imposed it could jeopardise the sector.
“Before trying to implement any law, its impact on the economy should be thoroughly studied. They should calculate weather enforcing such laws would deter investors and hamper businesses, ultimately harming the nation,” she said during a press conference yesterday.
“If big investors come to develop towers in Bahrain but are burdened with taxation, high consultation fees, difficulties to get permits and clearances, they will take their investments to other countries, “ she said, adding, “If we have the right laws and regulations, Bahrain can reach the peak in the next ten years. Supporting real estate sector will benefit all the sectors. Progress in the real estate sector will results in improvements in terms of employment, look and feel of the country, attracting investors and tourists. Tourism plays a great role in enhancing the economy and Improvement in the economy will translate to higher income for individuals.”
She said that real estate sector must be exempt from VAT.
“Charging VAT on the real estate sector will affect the market very badly. The tax should only be applicable in smaller areas, which will not affect the economy as much. If it is applied on something huge like the real estate sector, there will be negative consequences for the economy,” she said.
She said that high interest rates charged by banks are causing investors to take businesses elsewhere.
“Some of the interest rates charged by banks are high. This is causing the economy real harm as investors prefer other investment destinations where rates are cheap,” she said.
“I am thankful to His Royal Highness Prime Minister Prince Khalifa bin Salman Al Khalifa for his support and guidance to the real estate sector. Under his guidance this sector has made so much progress and will continue to grow quickly,” Al Mannai said.
“I fully support the authorities in their efforts to improve the financial situation of the nation by charging fees, but I hope they will do so in a wise manner without causing any negative consequences to key sectors such as the real estate sector,” she said.
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