Malcolm Borthwick, Editor, Middle East Business Report, BBC World, Dubai:
Dubai is a city of superlatives, where everything has to be the biggest and the boldest. But like many of the world's past tallest buildings, Burj Dubai was planned and built during the boom years, and finished during a property crash. The Empire State Building was completed during the Great Depression in the 1930s and the Petronas Towers in Malaysia during the 1990s Asian financial crisis.
Mohamed Abdul Hadi is one local investor who made millions out of Burj Dubai long before the building was completed. "In 2007 we bought three floors on Burj Dubai," he told the BBC. "The first investor paid 2,500 UAE dirhams ($680; £420) per square foot. We bought at AED 3,500 and one year later we sold at around AED 5,000. Look at the profit, where else can you have this but Dubai? And with no taxes."
Taxes are always an important factor to the distortion of the investment landscape. With no Capital Gain Tax to pay and reckless monetary credit expansion, it's only a matter of time before "asset prices" are hyperinflated artificially. Is debt, not wealth stupid!
To think that commodity prices are driven by speculators is quite simply outrageous. Capital Gain Tax imposed on investment in commodities is still one of the highest in the industry, ranging from 40 to 60%! One day when your friends, accountants, lawyers, etc all tell you to buy Gold or Crude and you pay no taxes on your gain, that's the time to sell your lots to them!
-----//-----
Reference:
0 comments:
Post a Comment