Amendment proposed to replace TGST with real estate tax on long-term resort room rental
MIRA will have to make thorough regulations relating to real estate tax and administrative measures to be taken for non-payment of taxes.
By
Aishath Fareeha Abdulla
Government has proposed an amendment to charge a real estate taxe instead of Tourism Goods and Services Tax (TGST) on long-term rentals of villas or rooms from resorts in Maldives.
The tax change is proposed by the government in an amendment to the Tourism Act. The first reading of the bill was heard in the parliament on Wednesday.
According to the amendment, tourism real estate tax will have to be paid at the rate of 4% of the total cost of selling rights related to a villa or room in a resort in connection with long-term lease transactions on a strata basis.
With the passage of this amendment, TGST chargeable on villas or rooms rented for long-term will come to an end.
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Those who are liable to pay the real estate tax will be fined if they do not pay the tax in accordance with the regulations
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It also said that MIRA will have to make thorough regulations relating to real estate tax and administrative measures to be taken for non-payment of taxes.
The amendment, moved by Kendhikulhudhoo MP Ahmed Esa, states:
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Where more than one lagoon is leased to the same party for the operation of a resort, the rights of the lagoon lessee, if transferred to a third party, may be entered into a succession lease agreement for individual lagoons
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If the lessee requests for an extension of the term of the island/lagoon or land leased for the construction of the resort, the term may be extended for a period not exceeding 50 years from the date of lease under Article 9(c) of the Act; If payment is made within 1 year of the effective date of the amendment, the payment is USD 100,000 for each year of extension and USD 200,000 per year if later.
