Property tax in Armenia will increase significantly from 2021

ArmInfo.Property tax in Armenia will increase at least 2.5-3-fold. Sarhat Petrosyan, chairman of the Real Estate Cadastre Committee at the government, said this after answering the question of ArmInfo after the government meeting.

On June 20, at the meeting of the Cabinet of Ministers, the Armenian government approved the draft RA law "On the establishment of the procedure for assessing the cadastral value of real estate close to the market price in order to calculate real estate tax", prepared by the Cadastre Committee. As part of the requirements of the Tax Code of 2016, an increase in property tax has been planned since 2019. But for this it was necessary to change the order of its calculation - to charge the tax at the approximate market cadastral value. The State Cadastre said that the current cadastral value of real estate is badly behind the times, since the last time the assessment was carried out back in 2002.

As a result, it does not reflect the real situation of the real estate market and is very different from the current market value. The state allocated 240 million drams for the evaluation work. Work on the revision, or rather, the assessment of the cadastral value of real estate started only in 2018. It is noteworthy, that the work coincided with the "velvet revolution" and the period when post-revolutionary euphoria, as well as talks about the huge repatriation flow, were at the peak of their development - from April to October 2018. Independent appraisers conducted new calculations, covering about 51 thousand units of real estate throughout the country, they were supplemented, according to Petrosyan, with reliable data from the database of the State Cadastre. As a result, today the Cadastre Committee proposes to introduce in Armenia instead of the current property tax and separate land tax a new concept-a property tax, which will combine both of these taxes. The studies did not affect agricultural lands. Non-used, non-working land assets have not been considered either. 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 330 thousand drams.

The cadastral cost of housing in this region has increased by several times - up to 700 thousand drams per square meter. Here, appraisers even showed some "restraint." According to Petrosyan, the cadastral value in some cases reaches 1.5 million drams per square meter in the small Center. In parallel, a new zoning system was compiled, consisting of 22 belts throughout Armenia, instead of the previous 17. The center of Yerevan headed the list, where the cadastral value of the real estate turned out to be the most expensive, and the Abovyan, Sayat-Nova, Tumanyan streets, Republic Square, and the Cascade were in the "top". 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, towards increase. From January 1, 2021, Armenian residents will start paying real estate tax on a new, possibly many times higher rate. When asked by ArmInfo, what if, by the time the new regulations come into force, prices in the real estate market will register a decline, the head of the Committee assures: "a new assessment will be carried out." But, according to Sarhat Petrosyan, regular 240 million drams from the budget will not be required.