In early April, the Ministry of Finance issued executive instructions for Legislative Decree No. 3 of 2023, which grants tax exemptions to people affected by the February 6 earthquake. Some of the exemptions are related to entirely or partially destroyed properties.
Notably, the executive instructions procedurally violate property and housing rights, as they do not provide any mechanism for absentee property owners in affected areas to benefit from the exemptions stipulated in Decree No. 3. This is despite the fact that it could have been possible to allow the relatives of the absentee owners, or their legal representatives, to submit documents or licensing requests on their behalf. Failure to include such a measure prevents absentee property owners, including those forcibly displaced from their homes, those wanted for security reasons, or detainees and missing persons, from benefiting from the decree.
Decree No. 3 included exemptions for damaged properties from some taxes and fees and granted owners temporary exemptions from future taxes. It also eased obtaining loans to do restoration work on damaged properties. The executive instructions were limited to providing wide-scale, detailed explanations for the tax exemptions included in the decree. It detailed the procedures of forming and running the committees tasked with identifying which owners and damaged properties could benefit.
Article 2 of Decree No. 3 stipulated the formation of a committee to identify those affected by the earthquake in each impacted province. The executive instructions clarified the committee’s tasks: to identify properties numbers in the affected areas, whether they are commercial establishments, homes, or buildings that were completely or partially destroyed; describe the damage or destruction; determine the building’s occupancy status, identify its use (residential or commercial); and list the owners’ names, property documents, occupants’ names, and their legal documents. In other words, the inventory and description committee’s tasks are identifying, counting and describing the impacted properties.
Owners of damaged properties must submit their official documents to the committee, in addition to a police report proving damage to their property and a certified record from the public safety committee operating in that governorate. The committee then prepares a record of its work, and the governor issues lists of the affected property owners via a decision.
The executive instructions for Decree No. 3 allowed those whose names are not included in these lists to submit applications to their governorate within 90 days. The same committee then reviews these names and can reject them with reason. However, the instructions did not stipulate that people could appeal these rejection decisions before a special independent committee, contrary to the legal procedures followed in a usual appeal process.
Meanwhile, people whose names appear in the lists have until the end of 2024 to submit applications for construction and renovation permits from their local administrative units. Each permit includes information about the property owner, property number, real estate area, accurate work details, and the time needed to complete it. With those items submitted, the applicant can benefit from the exemptions mentioned in Decree No. 3.
The decree does not exempt people impacted by the earthquake from paying the real estate sales tax stipulated in Real Estate Sales Law No. 15 of 2021. However, it does exempt such taxes if the sales transaction took place before the implementation of Law No. 15. Meaning that an official must document the sales deed before Law No. 15 came into effect. In essence, this stipulation implies that the property owners affected by the February 6 earthquake must submit official documents (such as a property financial clearance certificate issued by the finance department) that were certified before the enforcement of Law No. 15. The owners may instead provide certified copies of the financial records approved by the tax authorities if the documents were lost during the earthquake.
Finally, according to the executive instructions, rental transactions of properties in earthquake-affected areas are exempt from fees usually charged by administrative units under the Financial Law of Administrative Units No. 37 of 2021.