Construction companies and real estate agents are applauding the questions that President Lenin Moreno has chosen to include on the upcoming national referendum. In particular, they like the one that would eliminate the 2016 Law of Goodwill, which substantially increased taxes on real estate capital gains.
“We will vote yes on all seven of the president’s questions and are very happy that one of them will eliminate the Law of Goodwill, which placed an unfair burden on the construction and real estate sectors of the economy,” says Leopoldo Ocampo, vice president of the Chamber of the Construction Industries.
Ocampo said that the law, which taxed some capital gains at rates as high as 70%, has cost thousands of jobs and crippled the construction industry. “It’s impact has been devastating not just to our industry but on every Ecuadorian who owns real estate,” he said. “Once we get rid of this, I predict that we will resurgence of building and sales throughout the entire country. We will see investments returning to the market and this will create tens of thousands of new jobs.”
In a discussion with journalists of Wednesday, President Lenin Moreno agreed that high capital gains taxes are hurting construction starts and real estate sales. “The economy is struggling and repealing the law is one way to help increase investment and revive employment. This was an ill-advised, abusive law that should never have been enacted.”