Businesses and families in Tirana will pay 17 million euros more in taxes for the building

The municipality of Tirana plans to collect this year a record of income from the building tax, especially from businesses, as a result of the application of the new reference prices, which began to be implemented from July last year, automatically increasing the obligation for this tax. .

According to the budget realization report for the 8th month of Tirana Municipality, for the year 2024, the Municipality of Tirana expects to collect 3.8 billion ALL from the building tax, of which 2.9 billion ALL (77%) from businesses and 869 million ALL from families. This amount is 80% higher than the annual average collected during 2018-2023 by businesses and households, which results in 2.1 billion ALL. In value, businesses and families will pay 1.7 billion ALL (17 million euros) in building tax this year.

The actual realization, for the 8th month of 2024, meanwhile, was almost ALL 2.5 billion, or about 20% of the annual average of 2018-2023.

According to the data for the 8-month actual budget, the highest increase in receipts in 2024 for the building tax is for commercial entities.

For the business category, the actual receipts of the 8th month are 2 billion lek (20 million euros) according to the data of the monitoring report for the realization of the budget indicators for this period. Compared to the annual average in 2023, receipts for the period January-August 2024 have increased by 11%.

The increase in building tax collections for this category was expected, since the increase in fiscal prices for the 32 cadastral areas of Tirana increased the obligation of businesses from 5 to 91% (according to Monitor's calculations for the 32 cadastral areas, taking as an example a commercial unit with an area of ​​100 m2).

Compared to the value of the annual building tax that was paid by businesses, after the increase in fiscal prices, it is almost 9 times more than the payments of family members for the building tax.

The formula for calculating the tax value of the building where the economic activity takes place, provides that the tax is 0.2% of the value of the store, while the value of the store in Tirana is calculated as twice the fiscal price per square meter of the apartments.

Likewise, as for family members, the new obligations for the tax on the building were reflected by the Water-Sewage agent in the drinking water invoices for the month of August 2023. For business entities, based on the guidelines received from the Ministry of Finance, from the Directorate of local taxes, the loading of obligations for the period August - December 2023 was determined to be done with the obligations of 2024.

For the category of family members, the receipts of the 8th month of 2024 have reached 460 million ALL or 53% of the value expected to be collected in 2024. The receipts of 2024 are expected to increase by 30% compared to 2023. According to Monitor's calculations (taking an apartment with an area of ​​90 m2 as an example) the annual tax payment from 5% to 76% was added to individuals from the fiscal price changes.

For the years 2018-2022, the progress of tax collection for the building turns out to have been at almost the same collection levels, at around 2-24 billion ALL per year. Excluding the year 2020, where receipts for the business fell by 14% compared to 2019 due to the decision to reduce the obligation for the hotel sector to the extent of 30% for the annual obligation of this tax.

The portion of unpaid obligations in 2020 was collected in 2021, having the highest level of collections compared to previous years. While the increase in receipts in 2023 came after the changes in the obligation for the household category were reflected by the agent in the drinking water bills in August 2023.

After the tax on the impact on the infrastructure, the tax on the building is among the most weighty sources in the budget of the Municipality of Tirana for the year 2024 and constitutes on average 21% of its total income.

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 increased the obligation to pay the annual tax on the building, 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 average reference prices. For residential houses, the tax level is 0.05% of the value, while for commercial units 0.2%./ Monitor