The index, which covers six districts of Ulan Bator, the capital, was first published in the fourth quarter of 2008 by the National Statistics Office of Mongolia.
In the first quarter of 2011 the “average band” of Ulan Bator house prices ranged from MNT850,000 (US$702) per square meter (sq. m.), to MNT1.48 million (US$1,223) per sq. m..
However, luxury apartment prices range from MNT2 million (US$1,653) per sq. m. to MNT10 million (US$8,264) per sq. m.
As the economy returns to double-digit growth, the property market is expected to continue recovering in 2011 and 2012.
Foreigners can freely own property in Mongolia through the Immoveable Property Ownership Certificate, which is equivalent to freehold ownership.
Analysis of Mongolia Residential Property Market »
Prices have been rising rapidly due to rising demand. Capital appreciation has been around 15% per annum in the past three years, according to Mongolian Properties, a development company.
Capital Gains: Capital gains are considered as part of income and nonresident individuals are taxed at a flat rate of 20% on their capital gains realized from selling real property.
Inheritance: There are no inheritance taxes in Mongolia.
Residents: Residents are taxed on their worldwide income at a flat rate of 10%.
Despite the explosion of riches at the upper levels of society, wealth is very unevenly distributed. The economic growth rate of 7.25% (5-year GDP per capita growth, IMF) has not been enough to cause a substantial ‘trickle down’. A large proportion of the population lives in poverty. However democracy is securely established and no-one is seriously trying to challenge it. Serious unrest does not seem possibility.
Politics is now dominated by debates about how much of the deposits the government should claim, and what taxes are applicable, and how those revenues will be distributed.
Mining accounts for over 60% of total foreign direct investment. In October 2009, the Mongolian government passed the long-awaited Oyu Tolgoi Investment Agreement—an agreement to develop Oyu Tolgoi mine, which is considered to be one of the world’s largest untapped copper deposits.
Mongolia’s economy expanded by about 6.1% in 2010, after experiencing a 1.6% contraction in 2009 and an 8.9% growth in 2008. The economy is expected to grow by 10.3% in 2011 and by 7.6% in 2012, according to the IMF.
Recently, the central bank decided to raise the key interest rate to 11.5% mainly to curb inflationary pressures. The IMF warns that inflation may reach 25% by end-2011.