Reference prices according to the age of the property, which will be reduced by 50%

2024-01-16 09:33:00, Ekonomi CNA

Reference prices according to the age of the property, which will be reduced by

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The directive of the Ministry of Finance and Economy for the review of the formula for real estate taxation in case of sale, in addition to reducing the reference price by 1% every year depending on the age of the building, provides for a 50% reduction in the reference price for privatized apartments in ' 92.

Currently, for buildings privatized by law no. 7652, dated 23.12.1992, "On the privatization of state housing", amended, the price per square meter is 70% of the price according to the cadastral areas, only in the case of the first sale. So for the apartments built in the communist period, due to depreciation, their sale price is calculated with a 30% reduction of the reference price.

According to the Ministry of Finance, it is predicted that for this category of housing, the reference prices will be depreciated by 50% from the current 30%.

Examples of reference price reduction 1% per year when properties are sold

For other buildings, the new guideline provides that the reference prices will be depreciated by 1% per year depending on the age of the building.

So if the building was built in 2010, in case of sale of the apartment in the area of ??the former block where the reference price is 228,400 ALL per square meter due to depreciation, the reference price is reduced by 14% (if the apartment is sold in 2024). So due to the calculation of the 15% profit tax, the value of the property will be calculated with a reduced reference price of 14% or 31,976 ALL less per square meter.

For an apartment built in 2005 in the Madrasa area (cadastral area 8/2) where the fiscal price is 156,700 ALL per meter, if the apartment is sold in 2024 the value of the property will be calculated with a reduced reference price of 19% or 29,773 ALL less per square meter.

So it has been a constant request of the real estate agents of the real estate market to include the depreciation of the buildings in the reference prices in order to align them with the market prices.

"A building from the 70s-80s cannot have the same reference value as a building from 2020-2022. And in the future, it will be the market itself that will show this reality with apartments that are sold under the new defined reference", Dritan Leka from the real estate agency "Century 21 CPM Smart" told Monitor earlier.

Even the head of the real estate agency "Century 21" Ionian Antoni said earlier that the formula used to calculate the reference in Albania is wrong, as it does not take into account the depreciation of the property. "The published reference price should have been for new properties, and then from the reference price, when the properties are sold, 20% of the value should be reduced with a formula every 10 years. So if we were to buy a property that was built 10 to 20 years ago, the reference price would be -20%, if we were to buy one that was built 20-30 years ago, the reference price would be -40% and so on," he said. he.

The changes to the 2018 decision published at the end of July 2023 that entered into force immediately after publication in the Official Gazette increased the fiscal prices of apartments for the 32 cadastral areas of Tirana from 5 to 76%. While for the 5 administrative units, such as: Dajt, Farke, Kashar, Petrelë and Peze, the fiscal prices increased from 29 to 60% more than in 2018. For the other 67 municipalities of the country, the reference prices of apartments remained unchanged.

The increase in fiscal prices automatically led to an increase in the annual tax payment of apartments, commercial units and other buildings, since the tax is calculated on the value of the house or shop.

For both categories, the local government calculates the value of the building (both for residential and commercial activity) according to reference prices. For residential houses the tax level is 0.05% of the value, while for commercial units 0.2%. Tirana is divided into 32 cadastral areas, as well as 13 municipalities outside the city, which after the amendments to the law on local autonomy are recognized as administrative units.

The Minister of Finance and Economy, Ervin Mete, claimed earlier that this year there will be a review of reference prices in coastal areas as well./ Monitor