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Kazakhstan is exploring new measures to regulate its booming real estate market, with a focus on curbing speculative practices. The head of 'Otbasy Bank', Lazzat Ibragimova, has proposed increasing taxes for individuals who buy properties, renovate them, and then resell them at a higher price, a practice often referred to as 'flipping'.

Addressing Market Heat

Ibragimova believes that speculators and so-called 'investors' are significantly contributing to the overheating of the housing market and driving up prices. These individuals often purchase properties with available funds, undertake cosmetic renovations, and aim to profit from quick resales. She argues that this activity inflates the market, making it harder for genuine homebuyers to find affordable housing.

Proposed Tax Reforms

To combat this trend, Ibragimova advocates for the implementation of tax-based interventions. She supports recent amendments to the Tax Code that would increase taxes on owners of real estate valued above 450 million tenge. Her proposal extends to significantly raising taxes for individuals owning multiple properties.

"People who can afford to buy eight or nine apartments should pay taxes in the range of 10-20% of the investment," Ibragimova stated. She questioned the fairness of such investments benefiting only a few families while others struggle to own even a single home, especially when public funds are invested in infrastructure like electricity and heating networks.

Encouraging Responsible Ownership

Ibragimova suggested increasing taxes during the registration of second and subsequent properties. This, she believes, would encourage individuals to register properties in the name of the intended beneficiaries, rather than accumulating multiple homes for commercial purposes. She emphasized the need for stricter regulation in the housing market, noting that property prices in Kazakhstan, when calculated in tenge, have historically shown an upward trend.

"The average Kazakh, upon receiving funds from their savings or a slight increase in income, automatically considers buying another apartment. An apartment is an investment asset. This is good, but it needs to be strictly regulated by legislation. Taxes need to be increased for those who have a second, third, or fourth apartment. Then, if you buy an apartment for your grandchild, you will register it in your grandchild's name," concluded Lazzat Ibragimova.

This initiative aims to create a more balanced and accessible housing market for all citizens of Kazakhstan.

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