Myanmar has long been known as a potential investment star of ASEAN for years to now. Like any border market, the country experiences ups and downs.
The uneven implementation of both the 2016 condominium law and the 2017 condominium rule caused some confusion that made it difficult for foreign buyers to invest in Myanmar real estate.
However, the country is finally turning the corner and this means that now may be a good time to invest in Myanmar’s real estate. Last year, the Ministry of Construction formed a committee to roll the ball and now international investors can buy a coalition unit in the country.
As it is finally possible to invest in Myanmar real estate, the question now is what should you do. As with all marginal market investments, there is a risk, but anything currently available in Southeast Asia can be better than returns.
Some reasons you should invest in Myanmar real estate
The first movers were always compensated
If you are examining investing in Myanmar real estate, look no further than Bangkok or Metro Manila for the advantages of being a first-mover. The conference also found that prices increased by at least 50 percent between 2014 and 2018 and some regions reported higher price increases.
There is a similar story in Metro Manila during the last few years, as the strong economy from the foreign investment has led to a rise in fuel prices due to research by Bangko Central NG of the country’s central bank Pilkinaos.
A city like Yangon can be prepared to see a similar development in the coming years. However, the difference between five years to today and today can be a costly one.
Myanmar’s economic outlook is stable in the middle and long term
After its inauguration, Myanmar’s economic growth accelerated with foreign investment as a major driver. Like other countries, the country is coping with the COVID-19 decline in the short term. However, foreign investors operating in the country, such as Accent Capital, remain enthusiastic about the economy’s prospects in the medium and long term.
That being said, Myanmar’s economic transformation is entering a critical threshold and the next few years will be significant as the post-development epidemic will have to be seen again.
Modern developments take shape
Perhaps the biggest concern facing investors is to trust a developer in a market where modern condensed areas are still unchanged. A developer in Myanmar is changing it.
The developer’s latest project, Diamond Inaya Palace, is a gamechanger for the Yangon property market. Not only is the project the tallest residential building in the city, but it is also one of the only developments offering luxury internationally.
The Diamond Inaya Palace is one of the most magnificent places with the rich greenery of the beautiful Inaya Lake and the Diplomatic Compound, presenting a stunning backdrop. No other project can match the ideas found in the units here.
Can foreigners buy Myanmar real estate?
Back in 2016, Myanmar passed a law that allows foreigners to buy condominium units in their names. The law was created after Thailand and allows foreign buyers to own up to 40% of the condo building’s total project space.
However, a law must be registered under corporate law to qualify in the first place. Since this law was enacted in 2016, there was hardly enough time to register and develop the entire project under Myanmar’s Condo Act.
This essentially means that foreigners cannot buy property in Myanmar right now – even though the laws technically allow for it.
The fact that a foreign condo law was first passed is a step in the right direction, placing Myanmar above many other countries in Asia.
For example, places such as Indonesia and Vietnam do not allow ownership of foreign freehold property. Period.
Granted, it is only three years old and foreigners do not have enough time to successfully buy claims in Myanmar. But if you want, you can sit on the sidelines and wait for the dust before buying real estate in Myanmar.
Even more developed countries such as Thailand sometimes have manufacturing quality issues. So perhaps it is worth looking at which companies work as reputable builders before buying property in Myanmar.
I cannot believe enough, would suggest becoming a laboratory rat and dealing with the uncertain legal framework in the marginal property market. You have better investment options in Asia than in Myanmar.
How much are the property taxes in Myanmar?
For foreigners in Myanmar, rental income is taxed at a uniform rate based on your yearly income.
The tax rate ranges from 0% to 25%, although the salaries of most foreign investors should place them at the very upper end of that range.
The stamp duty is also payable on rental income after a tenant moves out and depends on the rental period. For a period of less than one year, no tax is payable. The rates are 1.5% of the average annual rent for a period of one year to three years and 3% for a period of more than three years.
In practice, it is rarely collected by tax authorities. No one ever demands it and some Burmese landlords pay stamp duty on rental income.
Finally, there is a stamp duty on selling any real estate and transferring it to the buyer. If your property is located in Yangon, the rate is 7% of its total selling price. The tax rate for homes outside Yangon is 5%.
Of course, none of this matters because foreigners cannot buy real estate in Myanmar. These tax rates will be relevant when you are at the end.
Is buying Myanmar property a good investment?
No, even though foreigners were able to buy real estate in Myanmar which they should soon allow, the bureaucracy remains thick while property values in central Yangon are very high.
To be fair, I cannot advise anyone to buy property in Myanmar at this time. The cost of your opportunity not to invest in better markets like Cambodia, the Philippines, or Vietnam is very high.
Real estate prices in Yangon may fall to reasonable levels in the next few years. This guide will be updated as foreign ownership increases and Myanmar’s economy develops further.
Until then, consider investing in countries like Cambodia if you want to invest in marginal market real estate. You should achieve similar returns (and better yields) with lower profits than Myanmar.