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The seller irrespective of whether the property is located in urban centres or rural areas should pay the property transfer tax.

The National Assembly yesterday decided on this during the third deliberation on the Property Tax Bill 2020.

The good governance committee of the House had proposed that the property transfer tax be exempted in rural areas. A member of the committee, Drametse Ngatshang MP Ugyen Wangdi, said that the value of a property in rural areas was relatively less.

“The value of a property in urban areas is high compared to rural areas. Also, state facilities availed by people in towns and rural areas are not same,” he said.

However, most members said there should not be tax exemption on property transfer in rural areas. The House decided the property transfer tax at 3 percent of the property value.

Foreign Minister Dr Tandi Dorji said that property transfer tax should be imposed irrespective of where the property is located. He said that problems related to implementation would arise if property transfer tax were applicable only in towns.

The House also decided that the property transfer tax shall be payable by the seller. The Bill defines seller as the owner of the property, including the government, financial institutions, and other agencies, that auctions and sells properties.

The House approved the government’s proposal to reduce the vehicle transfer tax from 5 percent to 1 percent.

Bongo Chapcha MP Tshewang Lhamo said levying tax on the transfer of a vehicle would lead to double taxation. She reasoned that the first hand owner would have already paid the tax.

The House is scheduled to deliberate Section 9 of the Bill, which pertains to transfer of ownership within members of a family, on Monday.

According to the Bill, the property transfer tax shall be exempt at the time of change of ownership if, the property is transferred between immediate family members.

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