SANTO DOMINGO.– Omar Fernández, senator for the National District, said that the change proposed by the government in the Fiscal Modernization bill to the Real Estate Property Tax (IPI) is worrying because this measure would not only affect property owners, but would also have a direct effect on rental prices.
He explained in a video posted yesterday on his Instagram account that this is a cost that the property owner will be forced to pass on to his tenants.
“If you own a home, and the government estimates its value at around 7 million pesos, you would be paying 20,000 pesos a year, which would likely be equivalent to an extra payment on your mortgage. Or, to put it more simply, you would be a perpetual tenant in your own home,” the politician stated.
He argued that the government's proposal fails to consider either post-pandemic inflation or the rise in bank interest rates for home purchases. "And to all this we must add the effect this measure will have on one of the industries with the greatest impact on our economy: construction," he stated.
Omar Fernández. (External source).
He added that the construction sector pays taxes, generates jobs and mobilizes a whole chain of suppliers, and that it will receive a setback that will undoubtedly result in lost jobs and even a significant reduction in tax revenues.
“The fact is, gentlemen, having a decent roof over your head is not a luxury, and this is recognized by our own constitution, which states that access to housing is a fundamental right,” Fernández declared.
He argued that "the country we will become with this reform is nothing like the country we want.".
He emphasized that his analysis of the proposal being studied in the Chamber identified that the IPI is a tax that worries Dominican families who, with much effort and sacrifice, have managed to acquire a decent roof over their heads.
"In its proposed reform, the government lowers the taxable amount of the IPI from about 8 million to 5 million pesos, thereby forcing a significant number of people who previously did not pay this tax to face it.".
In addition to this, Omar Fernández emphasized, the taxable amount will be valued according to the market value of your house, regardless of whether you are selling it or whether it generates any income for you.
“That’s why I think that far from discouraging real estate development, the local government should focus on reducing unnecessary current expenses and improving the technological capabilities of its tax collection agencies,” he noted.
