A 5% duty on all property transactions off-plan was introduced by the Government today as a temporary policy to raise more than 10 billion golles in foreign exchange within a period of five years to help finance the construction of the City of Mount Vema infrastructures.
When it comes to raising long term capital, the Government never seems to run out of options. The more the entities of the Kingdom of Mount Vema come of age, the more the government’s pocket get deeper with the ability to raise finances for just about any project it wishes to fund. This weekend the Treasury has decided to look for revenues in one of the fastest growing business within the Mount Vema economy, the Off-Plan Property Market.
The value of all City of Mount Vema Off-Plan real estate is 1.6 trillion golles (about $2 trillion US dollars) according to estimates released last year by the Royal Mount Vema Reserve Bank based on the number of properties to be built and its current value.
The overall cumulative value of all residential and commercial off-plan real estate, and estimated gains are calculated by measuring the difference between the estimated cumulative real estate off-plan values as of the end of 2020 and anticipated cumulative real estate values at the end of 2025.
The Mount Vema property market is building on positive momentum that has begun with off-plan sale (people buying and selling off-plan assets almost on daily bases for profit). The demand comes after news that the Mount Vema government will aim to maintain sales of off-plan assets to no more than 10% of all development units. The rest are reserved to let, or to be used to raise funds to meet liquidity needs to maintain a sustainable supply and a healthier market that could result in annual appreciation of between 3 percent and 5 percent. That makes the Mount Vema off-plan market a growing business.
Current rates and the growing economy is helping bring buyers into the off-plan property market, boosting demand and driving prices up, according to a report from the Ministry of National Development and Land Maintenance. Mount Vema real estate although off-plan, is already highly valuable. The 1.6 trillion golles total value of the Kingdom of Mount Vema entire projected property stock and the Vema Seamount territory itself is more than the combined gross domestic products (GDP) of some well-developed countries.
The temporary 5% stamp duty introduced will be made permanent in 2025 not as Duty on Off-Plan, but as Stamp Duty on Property Transactions. It will remain on the statute book from 2025 although it will be substantially altered, which may include loans to be secured against real estate, according to sources familiar with the development plans.
The treasury could have used other options to raise capital including currency swaps, considering that large parts of the City of Mount Vema will be built outside Mount Vema. Another option would be, with its marine life alone, the territory is an asset that represents a value that can be converted into cash as collateral at any time to enable His Mount Vema Majesty’s Government to raise finance to pay for the country’s obligations at any time. But the government makes very little use of this option as it forms part of His Mount Vema Majesty’s Reserves and requires the approval of the Sovereign – The Vema Seamount Authority, who is not likely to grant his Royal Seal Approval when funds can be raised elsewhere.
Off-Plan Stamp Duty - How and when to pay
You must pay the tax within 14 days of completion to ‘HMVM Revenue Services’. If you have a solicitor, agent or conveyancer, they’ll usually file your return and pay the tax on your behalf on the day of completion and add the amount to their fees.