Real estate is likely to become a costlier investment across the GCC region following the implementation of VAT (value-added tax), a survey of local investment professionals revealed. With VAT set to be applied on the first sale of properties, 87% of investment professionals said that some or all of the additional expenses incurred by real estate firms will be passed on to investors.
Other findings showed that over half, 54% of CFA (Chartered Financial Analyst) Society members surveyed believe that retail investors will be impacted more than institutional investors from the rollout of VAT, with only 4% stating that institutional investors would face greater impact.
CFA Bahrain Society President Mahmoud Nawar said “Given that taxation at higher rates is a norm around the world, the GCC will continue to be attractive as average tax rates are lower than almost all other major markets. With regional financial markets expanding, the potential MSCI inclusion for Saudi Arabia investment in commercial infrastructure and economic diversification programmes underway, the GCC will continue to remain a market of opportunity for the investment community”.
Source Credit: Gulf Daily News