LAST month’s property tax reform seems to have heightened interest in luxury homes, property industry sources say.

Just weeks ago, the government took measures that cut sales tax on properties valued at more than K5 billion from15 percent to 12pc, while also simplifying and speeding up procedures. Since then, demand for high-end homes has strengthened.

Citing the tax reform, U Than Oo, managing director of Mundine real estate agency said another reason for the boost in the luxury property market was the weakening of competing investment options like vehicles and gold.

“The car market at the moment is cool and the price of gold has fallen. Those investments are not giving a solid profit like the real estate sector,” he said.

U Than Oo said high-end luxury properties did not lose their value with the passage of time. “The rise in the value of high-end property, whether commercial or residential, covers inflation,” he said.

He said high-end activity in his agency had increased since Cyclone Nargis hit in May.

“We’ve been dealing in K300 and K400 million luxury properties on Pyi, University Avenue, Kabar Aye Pagoda and Dhammazedi roads,” he said.

Daw Nan Than Yee, of Pan Tha Khin real estate agency, also noted an increase in the number of customers – from three to six – interested in more expensive properties. “Due to tax simplification, the number of customers for high-end properties doubled in August compared with July. This is because there is now no need for the property buyer to show the source of purchase funds, and because the tax to the township revenue department has been reduced,” she said.

She said her agency gets orders in Bahan and Kamaryut for luxury duplexes ranging in price from K400 to 700 million.

But U Ko Ko Lay, the general manager of Three Friends Construction and Decoration, said the increased demand was not due to the simplified tax structure but because people see property as a sound investment. “After Nargis, people sought luxury duplexes in such locations as Thuwanna and Yankin townships for K200 to K300 million. This is because they see property as a long-term investment rather than because of simplified tax procedures,” he said.

In August the market was cool as people decided to wait and assess conditions for a while. “But I think after Thadingyut the high-end property market will become active again,” he said.