Property tax, how much will the obligation for businesses and citizens increase? The formula how it will be calculated

2024-04-16 09:15:53Biznes SHKRUAR NGA REDAKSIA VOX

The housing tax, which will start to be applied from 2026, will increase the obligation for citizens and businesses. Its calculation will be based on the prices that are in the market today, while the level of taxation will vary from 0.05 percent, which is currently 0.1 to 0.3 percent. Experts say that this formula will bring inequality, while the burden will again fall on regular taxpayers.

"The recent property tax reform aims to increase revenue for municipalities by moving from a value-based taxation system for buildings and a simple area-based taxation system for agricultural land and land to a modern that taxes both buildings and plots, based on the market value of these real estates. All registered immovable properties will be assessed based on market value," the government document says.

The experts are pessimistic about the collection of this tax, as long as the previous problems have not been addressed, which according to them could become an obstacle to its collection. The most pressing issue remains informality.

In the Sectoral Strategy for the Management of Public Finances, published recently, it is stated that of the 4.5 million properties that Albania has, only 1.2 million are registered.

For the remaining part, i.e. for 3.3 million unregistered properties, the process is intended to be completed by 2030. In 2026, it is expected that the new formula for housing taxation will begin, while in 2028, taxation for agricultural lands will begin.