El Salvador: Tax on Unused Properties Proposed

A bill aims to tax properties of any value that either do or do not have constructions on them, and which do not have a specific use anywhere in the country, declaring them "luxury goods".

Monday, May 19, 2014

The proposed law states that "... property for recreation, leisure or rest, with or without construction or under construction, regardless of its value or location , such as houses, lots, plots, villas located in beaches, lakes, mountains or the city ... "will be taxed at 1% on the assessed value established for the property.

"The Finance Minister said the levy for properties that did not have a productive function applies only to properties whose value exceeds $350,000, whether they be one or several properties which add up to this amount. However, in Article 1 paragraph c) of the bill ... it is detailed that the tax applies to properties that are described as for recreation or leisure, regardless of their value," according to an article in Elsalvador.com.

"We believe that someone in this country who has a property worth up to $350,000 - I am going to say something many people will not like - is privileged, and when they have properties that add up to $350,000, lodges, summer houses, really, it is not possible that they dont pay anything, they have to contribute something," reflected Carlos Cáceres, Minister of Finance.

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