The increase in the reference of the buildings costs the businesses of the residents in Tirana an additional 15 million euros per year

In 2025, residents and businesses of the capital are expected to pay 3.65 billion lek (about 36 million euros) as tax for the buildings where they live, or carry out their economic activity.

The figure is announced in the municipality's draft budget for 2025. Compared to the annual average of 2019-2023, of 2.1 billion lek per year, the income from the building tax has increased by 74%, or 1.5 billion lek (15 million euros) more per year.

Although the tax on the building has remained unchanged, the increase in the reference price of buildings, since August 2024 has automatically had the effect of increasing the duty that businesses and individuals must pay.

Businesses have even recently paid the additional duty that arose from the change of reference for the period August-December 2024, as an ambiguity was created that led to the blocking of the accounts of many entities.

In relation to the draft budget 2025, the Municipality of Tirana claims that the tax on the building is among the most weighty resources in the budget of the Municipality of Tirana and constitutes on average 13% of its total income in reference to the actual realization of 10 months and the one expected for the year 2024.

The calculation of the tax for the building/property unit is based on the percentage rate of the tax approved by law, more specifically according to point 5, article 2, of VKM 132/2018, amended and law 9632 dated 30.10.2006 "On the tax system local" changed according to categories of buildings, as follows:

a) 0.05%, for the building/property unit that is used, is used for residence;

b) 0.2%, for the building/property unit that is used, is used for economic activity;

c) 30% of the relevant tax rate, for the entire construction area, for which the developer has been provided with a construction permit and has not managed to complete it, according to the deadline defined in the act of approving the request for a construction permit.

On 28.07.2023, the application of new reference prices entered into force, where the average reference prices for the sale and purchase of buildings used for the purpose of housing a significant part of the administrative units of the Municipality of Tirana were changed.

These changes were replicated by the Tax Agent for family entities in the invoicing of August 2023 and for the General Directorate of Local Taxes and Tariffs based on the orientation received from the Ministry of Finance and Economy and were applied in September 2024 according to the decision of the Council Municipal Decree No. 35, dated 28.03.2024 "On some additions and changes to decision No. 158, dated 26.12.2019, of the Municipal Council, "On the system of local taxes and fees in the city of Tirana", amended with the provision of a transitional provision.

In 2023, this tax had the highest realization compared to previous years, while in 2024 the expected realization does not have the same comparative basis, since the reference prices have changed, changing the taxable base.

The year 2024 is expected to be the year with the highest realization during this 6-year period, both from the increase in collections and from the fact of the change in the building tax level, since the application of the new reference prices.

Income planning for the period 2025 - 2027 takes into account planning for the business category based on DPTTV data, while for the family category based on a preliminary assessment, according to the current data available from the database created by The Tax Agent, it is said in the report.

For the Municipality of Tirana, the structure responsible for the calculation and collection of the obligation for this tax from the entities that carry out economic activity in the territory of the Municipality of Tirana, is the General Directorate of Local Taxes and Tariffs, while for the obligations of the family category, it has been selected as the Tax Agent Ujësjellës-Kanalizime Tirana sh.a, by decision of the Municipal Council and regulated according to Cooperation Agreement no. 25505 dated 21.06.2019.

Based on the data of the 9th month of 2024 from the tax agent, subscribers billed on average per month during this period are 207,552, of which they have paid on average 170,778 per month. Excluded subscribers in the October 2024 billing related to the building tax are 28,772 subscribers./ Monitor