
The increase in reference prices for 61 municipalities in the country, recently published for consultation in the draft decision of the Ministry of Finance, is expected to automatically increase citizens' liability for building tax.
Reference prices set by the government are used not only for the purchase and sale of real estate, but also for calculating the value of property owned by residents.
The methodology approved by the government determines that the value of the apartment owned by a citizen is calculated based on reference prices.
While the building tax liability is determined based on the value of the apartment. As a result, the increase in tax liability for citizens will be in the same percentage as the increase in reference prices.
How much does the building tax liability increase in the districts?
The increase in fiscal prices will lead to an increase in the annual building tax payment for both residential apartments and businesses.
For houses, the building tax rate for both apartments and commercial units is calculated on the value of the house or shop.
For both categories, the local government calculates the value of the building (both for housing and for commercial activity) according to reference prices.
For residential houses, the building tax rate for residential purposes, i.e. for apartments, is 0.05% of the value, but it is at the discretion of the Municipal Council to adopt a level +30% higher or -30% lower than the national rate.
For example, let's take the city of Vlora, calculating the obligation for the apartment building tax above the national rate of 0.05%.
In Vlora the current reference price is 61,800 lek per square meter. The value of an apartment with an area of 90 m2 is calculated as 61,800 lek/m2 x 90 m2 = 5,562,000 lek the value of the house
Building tax liability 0.05% x 5,562,000 lek = 2,781 lek annual liability.
The new reference price for area no. 1 in Vlora is proposed to be 98,000 lek/m2. The value of the apartment is calculated as 98,000 lek/m2 x 90 = 8,820,000 lek.
Tax liability 0.05% x 8,820,000 = 4,410 lek annual liability.
The increase from the change in references is 4,410- 2,781 = 1,629 lek per year or 58.6% of the increase in the reference price./monitor