Introducing a capital gains tax on short-term investors

[JOHNNY-D]

Speculators trigger off-plan property price spiral in Dubai:

Off-plan housing properties in Dubai are showing signs of overheating due to "ultra loose monetary conditions", which trigger excessive speculation, Standard Chartered Bank said in a sector report.

As a measure to cool the market, the bank suggested that Dubai should take steps to weed out short-term investors, such as introducing a capital gains tax on properties sold within a year of purchase, or risk a correction.

However, long-term outlook for housing market remains positive, it said.

"Excessive short-term speculative activity has been further triggered due to loose monetary policies that have resulted in excessive liquidity in the market with investors seeking to purely leverage from their invested property, especially when it comes to off-plan housing properties," said Marios Maratheftis, Regional Head of Research Middle East, North Africa and Pakistan Global Markets for Standard Chartered Bank.

"Investors are willing to leverage up at a considerable cost in order to take short-term positions, "flipping" their properties before their installments are due," he added.

 

[New_Investor]

Speculators trigger off-plan property price spiral in Dubai:

Off-plan housing properties in Dubai are showing signs of overheating due to "ultra loose monetary conditions", which trigger excessive speculation, Standard Chartered Bank said in a sector report.

As a measure to cool the market, the bank suggested that Dubai should take steps to weed out short-term investors, such as introducing a capital gains tax on properties sold within a year of purchase, or risk a correction.

However, long-term outlook for housing market remains positive, it said.

"Excessive short-term speculative activity has been further triggered due to loose monetary policies that have resulted in excessive liquidity in the market with investors seeking to purely leverage from their invested property, especially when it comes to off-plan housing properties," said Marios Maratheftis, Regional Head of Research Middle East, North Africa and Pakistan Global Markets for Standard Chartered Bank.

"Investors are willing to leverage up at a considerable cost in order to take short-term positions, "flipping" their properties before their installments are due," he added.

Well SC bank is so lame, they can provide whatsoever theories they want, but let's look at the scenario if this happens and Dubai introduced Tax or any kind of means to reduce flippin,

first let's look at the facts,

i dont have exact numbers but i think majority of investors are actually buying to flip, and dubai is well aware and they actually encourage that buy low entry payment plans as low as 2.5% in some cases and leveraging i.e bank mortgage up to 100%, the reason behind this is for investors to make good money so dubai will have a good reputation hence liquidity world wide will poor into the country !!

Now let's look at a point that they try to reduce fliping, what will happen ???

i think most of investors will freak out and just take what ever they can and run, hence supply will increase and demand will fall which eventually will lead to market to crash.

Now i think that this is highly unlikable??

or what do u think?