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The infrastructure impact tax in Vlora is increased from 4 to 6-8%/ An increase in apartment prices is warned

2024-01-11 07:41:48, Ekonomi CNA

The infrastructure impact tax in Vlora is increased from 4 to 6-8%/ An increase

From January 1, 2024, the increase of the infrastructure impact tax from new constructions from 4% to 6% for some areas of the city of Vlora began to be implemented.

The maximum tax rate of 8% (the level of Tirana) will therefore be applied in more areas. The decision to change the infrastructure impact tax was approved by the City Council at the December 2023 meeting.

According to the approved decision, the tax rate of 6% of the impact on the infrastructure for new constructions will be applied to the facilities located on the front line in the areas, such as: from the street "Pelivan Leskaj" to the administrative unit Orikum, along the streets "Sazani" and "Gjergj Kastrioti" (in Transbalkanike), "Ismail Qemali" boulevard and "Pelivan Leskaj" street.

While the application of the maximum tax rate of 8% will also include new constructions from the Wharf area to the Tunnel area. In the previous decision, the first line of construction with the 8% tax rate included construction from the Skela area to Rrapi.

In recent years, Vlora has become an important tourist destination, which has stimulated interest in the purchase of real estate in the city, which have reached up to 2800 euros/m2 in the Lungomare area and over 3000 euros/m2 in the resorts.

The Association of Builders warns that the increase in the infrastructure impact tax in the city of Vlora is expected to increase the price of apartments.

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The Chairman of the Association of Builders of Albania, Erjon Harizi, previously stated for Monitor that, as a whole, in the construction sector during 2024, direct costs are expected to become more expensive due to the increase in taxes.

"In construction, direct costs will not be higher, while the impact of taxes from the government is expected to be increasing. If the maximum infrastructure impact tax (8%) is applied in Tirana today, some cities, such as Vlora, discussed increasing this tax from the current 4% to 6%. While the reference price changes will have an effect in the city of Tirana and are expected to increase construction costs by an average of 40%. Of course, this increase in costs will be accompanied by an increase in prices", he asserts.

The infrastructure impact tax from new constructions is subject to all entities that seek to be provided with development permits and construction permits for residential, administrative, production, and other service facilities.

For the capital, the infrastructure impact tax is at the level of 8%. In 5 years, namely the period 2018-2022, according to the data of the draft budget of 2024, the Municipality of Tirana has collected 32.9 billion ALL from the infrastructure tax for new constructions. Collections from this tax have increased after 2018. In 2022, the largest municipality in the country collected 7.4 billion lek from this tax. the expected receipts from this tax for the year 2023 foresees 7 billion ALL. the collection forecasts for this tax, referring to the draft budget data, are expected to be for 2024 in the amount of 6.3 billion lek. In 2025-2026, collections will be from ALL 6.5 billion.

With the decision of July 2023, the government changed the reference prices for the sale and purchase of apartments only for the 32 cadastral areas of Tirana and 5 municipalities, such as Farkë, Dajt, Petrelë, Kashar and Prezë. The average increase in reference prices for the 32 cadastral areas of the capital is calculated at around ALL 29,600 per square meter. The Builders' Association raised concerns that the increase in reference prices will increase their liability for infrastructure impact tax which is calculated on the reference prices. From the change in the reference prices, it is expected that there will be an increase in the obligation for families and businesses for the temporary tax of the educational infrastructure, since its value is 35% of the obligation of the building tax for the same entity as a family or a commercial entity. In the districts the references remained unchanged. Therefore, the Minister of Finance and Economy, Ervin Mete, stated earlier that this year there will be a review of reference prices in coastal areas in order to bring them closer to market values./ Monitor.al

The infrastructure impact tax in Vlora is increased from 4 to 6-8%/ An increase