Wednesday, June 19 2019 18:58

ArmInfo. From January 1, 2021, residents of Armenia will start paying real estate tax several times more, since the order of its calculation changes: from now on it is charged at the cadastral value close to the market.

On June 20, the Government of Armenia plans to approve a package of draft laws prepared by the Cadastre Committee of the RA Law on Establishing the Procedure for Evaluating the Cadastral Value of Real Estate near market in order to calculate the real estate tax and On Amendments to the RA Tax Code.  Recall that real estate tax residents of Armenia have been paying for cadastral value for several decades.  Assessment (revaluation) of buildings is carried out once every three years by the agency conducting the cadastre of real estate, according to data recorded as of July 1 of the year of assessment (revaluation). The current cadastral value of the property, according to the Cadastre Committee, is hopelessly outdated, since the last time the assessment was carried out already in 2003. "First of all, let us note that the cadastral value valid to this day does not reflect the real picture of the real estate market and is very different from the current market value," the department said.

The estimated cost of the state budget was 240 million drams. It turned out that today one square meter of land in the center of Yerevan, according to its cadastral value, fluctuates within 60 thousand drams, while in the new realities the market price reaches 400-500 thousand drams. The cadastral cost of housing in this region has increased by several times - up to 700 thousand drams per square meter. meter. In parallel, a new zoning system was compiled, consisting of 22 belts throughout Armenia. Again, in the "favor" were residents of the center of the capital.

Now it's time for the Ministry of Finance, which, based on the proposals of the Cadastre and the methodology for estimating the value of one unit of real estate on the republican account, will revise the taxation of real estate, naturally, upwards.  Earlier, ArmInfo reported that the tax code had been revised since 2019. Then it was decided to postpone work until 2020. Today they say that the new regulations will take effect on January 1, 2021.

At the end of May this year. Armenian Deputy Finance Minister Arman Poghosyan assured ArmInfo's correspondent that in order to avoid unwarranted and spontaneous estimates, the Cadastre Committee for statistical purposes will use not fresh data obtained, for example, after the velvet revolution and forecasts of possible repatriation of Armenians to Homeland over the past few years. Then, having already calculated the degree of increase in the tax base, the Ministry of Finance will be able to find out whether it is necessary to revise the non-taxable threshold (now this property is up to 3 million drams inclusive - Ed.), The tax rate, or both. In any case, the Ministry of Finance assured that they would try to avoid jumps, or "distorting the form" of this type of tax, in order to collect more taxes from high-value assets. "For example, if we find out that out of 600-700 thousand units of real estate, 100 thousand conditionally are above the 30 million drams price threshold, and 50 thousand objects are 50 million drams, we will determine the" luxury "property and establish new thresholds and progressive tax rates ", - explained Pogosyan.

                About the range of possible tax rates, as well as the potential of taxes on property tax, those responsible for the policy in this area promised to tell only after the synthesis of all the necessary information. According to the plan, these works should be completed by the 3rd decade of January 2020 and will be submitted to the approval of the government, and then the parliament.  It should be noted that after the "barbarous" privatization of property in the 90s, as well as the "fake" land auctions in the 2000s, a huge amount of immovable "non-working" property was accumulated in Armenia.  With the help of tax instruments, the new government hopes to stir up this stagnant market so that assets that are not doing any good to the economy or the budget today, in conditions of limited resources, would acquire a functional burden. Moreover, this project fully complies with the new tax concept of the government, which is trying to reduce labor taxation by increasing tax charges on capital.