Real Estate Sellers Get Break

Companies that try but fail to sell their real estate holdings will not have to reclassify them as noncommercial as long as they meet certain conditions, the government said Sunday. Because noncommercial real estate is subject to higher property taxes, the change will ease the tax burdens of firms trying to sell property.

The Ministry of Finance and Economy, recognizing that the sluggish real estate market has made it difficult to sell commercial land and buildings, said it would modify the corporate tax code.

Before the change, to take effect Monday, companies that failed to sell a real estate asset one year after it was first advertised were required to pay the noncommercial property tax rate for that period. But companies will no longer be subject to those higher taxes, as long as their sales efforts meet certain conditions: They must advertise the real estate in three major newspapers for at least three days and the asking price must not be higher than the appraised value of the property. To keep the noncommercial tax status of the property in succeeding years, the companies will have to reduce the asking price by 10 percent annually.