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From 2028, the owners' obligations for the land tax of houses will increase 45 times

2023-10-16 09:10:00, Ekonomi CNA

From 2028, the owners' obligations for the land tax of houses will increase

The draft law "On the taxation of real estate" submitted for consultation by the Ministry of Finance and Economy, will increase the obligations of the owners of land that is used for residential and commercial purposes, as it changes the formula for calculating the land tax for both categories.

According to the document "Property tax reform 2024-2028" where examples are presented for calculating the tax for each category (including residential buildings, for business purposes, as well as land, agricultural and forest land), the obligations of land owners for residential purposes increase up to 45 times more than they currently pay and the obligations for land used for commercial and industrial purposes increase 2 times.

Currently, the land tax is determined according to the purpose of use and categories of municipalities. The level of residential land tax varies from ALL 0.14/m2/year to ALL 0.56/m2/year. While the tax rate for land for commercial activity varies from 12 ALL/m2/year to 20 ALL/m2/year

With the new draft "On taxation of real estate" for all plots, which are included in the category of residential properties, the tax rate is proposed to vary from 0.1% to 0.3% according to the value of the plot of land. calculated with average reference prices. For the commercial property category, the rate of land tax can vary from 0.15% to 0.3%.

The tax for all categories of real estate will be calculated on the new value of the property. The value will be determined on a new map with average reference prices, but separated for residential building units, service, as well as average reference prices of plots, including land, agricultural and forest land.

In the Municipality of Tirana, for the plot of land with an area of ??500 m2 with a tax level of 0.56 lek per square meter, today the owner's obligation is in symbolic values ??of 280 lek per year.

According to the example "of a typical tax burden for a taxpayer for plots of land for residential purposes, in different municipalities, assuming the application of the lowest tax rate for that category" provided by the Ministry of Finance, the value of the land with a reference price of 26,073 lek per square meter is 13,036,500 lek. With the proposed new tax of 0.1% of the value, the owner will pay 13,036 ALL in tax per year. The obligation for the land owner increases about 45 times.

Even for the municipality of Durrës, according to the example brought by the Ministry of Finance, the annual obligation of a plot owner for residential purposes is currently 280 ALL per year. With the new draft, the annual obligation is expected to reach 7,500 ALL per year. Liabilities increase about 26 times more.

The draft stipulates that 50% of the new obligation, the owner of the plot of the house will pay in the first year of the implementation of the law and 50% of the remaining obligation in the second year.

If for the owners of private houses or villas it is clear that the annual land tax can be paid by the owner of the ownership certificate, it remains unclear how the land tax will be paid for multi-storey residential buildings, since the ownership certificate is owned by the municipality.

Sources from the Ministry of Finance clarified that the modality for the implementation of land tax payments for residential buildings will be discussed further with a wider group of decision makers.

How much do the obligations for the land for commercial purposes increase according to the Finance examples

The obligations of a business for land for commercial purposes according to the examples of the Ministry of Finance will increase 2 times more than they currently pay.

A business for a land area of ??1,000 m2 with the current tax level of 20 ALL per square meter per year pays 20,000 ALL in tax per year.

With the new draft, the tax rate is proposed to be 0.15% of the land value. So the tax will not be assessed in lek per square meter. The value of the plot calculated with the assumed reference price of ALL 42,475 per square meter given in the examples of the Ministry of Finance is ALL 42,475,000.

The annual obligation for this plot of land used for commercial purposes will be 63,712 ALL.

Whereas for a land area of ??5,000 square meters used by the business for industrial purposes, the obligations will reach 225,000 lek per year from the 100,000 lek per year currently paid. Obligations are increased 1.2 times more.

Even for land that is used for commercial purposes, the draft provides that 50% of the new obligation, the owner of the house plot must pay in the first year of the implementation of the law and 50% of the remaining obligation in the second year.

The new draft is expected to enter into force from January 1, 2026 for buildings, while for the categories that include plots, agricultural land and land from January 1, 2028.

LAND TAX RATE

Current tax rate:

The tax level for agricultural land and land is determined in lek per square meter

The tax level for agricultural land is determined according to land categories starting from 700 ALL/ha/year to 5,600 ALL/ha/year.

The tax level for the land is determined according to the purpose of use and categories of municipalities, where the values ??for residential land vary from ALL 0.14/m2/year to ALL 0.56/m2/year; land for commercial activity, the values ??range from 12 ALL/m2/year to 20 ALL/m2/year

Future tax rate:

For all parcels, which are included in the category of agricultural-livestock properties, the tax rate can vary from 0.1% to 0.3%;

For all parcels, which are included in the category of forest properties, the tax rate can vary from 0.1% to 0.3%;

For all plots, which are included in the category of residential properties, the tax rate can vary from 0.1% to 0.3%;

For all plots, which are included in the category of commercial properties, the tax rate can vary from 0.15% to 0.3%./ Monitor





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