(MENAFN - Muscat Daily) The Muscat Municipality has decided to crack down on landlords evading tax on property rentals by imposing fines. According to a Muscat Municipality official, all property rentals are subject to a three per cent annual tax.
''When a property is rented out, a contract between the landlord and the tenant must be entered into and submitted to the municipality.
''In the absence of a real estate agent, it becomes the landlord's responsibility get the rent agreement registered with the municipality,'' he said.
''The Municipal Council is holding talks to determine the fines to be imposed on tax evaders. There are some solutions being worked out such as determining the minimum value of rent for each property in the governorate depending on its size and location in order to calculate the tax. Fines will also be imposed on those who do not mention the actual rent in the agreement in a bid to avoid paying more tax,'' the municipality official added.
Meanwhile, some tenants blame real estate agents for not submitting the rent agreements to the municipality.
''I moved into a new flat five months ago, but haven't got my copy of the rent agreement. Whenever I ask for it, they tell me it is being processed,'' said Priti Kadam, a tenant of an apartment in Darsait. Agents, on the other hand, say landlords avoid making rent agreement.
''Some landlords feel the tax is too high, and want either the agent or the tenant to pay it. If the tenant or the agent refuses, they do not make the agreement,'' said Taha Hameed, advisor at ERA real estate age