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Electoral "candies" are common before elections. They are offered as a reward by the next government to entice voters and retain power for another term. They are usually in the form of infrastructure projects, tax amnesties or property revaluations.
And the latter, the government tried again, but the financial and economic conjunctures forced it to withdraw, in order to postpone the revaluation and thus leaving the real estate market hostage, together with the citizens who were waiting for this facility to sell or revalued their real estate, writes A2 CNN.
But what happened?
On May 15 of this year, the socialist deputy Blerina Gjylameti submitted to the Parliament a draft law that enabled the revaluation of all properties, including those in the process of legalization, with a 3% tax from the current 15%. An initiative that was welcomed by the citizens, but also by the real estate market, which for a year was under the influence of the increase in the price of references, which was initially made for the capital and which was expected to be extended to the whole of Albania through what is called reference map.
The initiative of the socialist deputy would remain archived in the Assembly for almost two months, not included in the agenda of discussions of the parliamentary committees. This situation lasted until July 17, when Prime Minister Edi Rama announced during a meeting with the mayors that the revaluation would be done, but with some conditions.
The tax will be 5% higher than the initial initiative, it will be valid for only one year and this is the last initiative of its kind to be undertaken by the government. All properties could be revalued, including those in the legalization process, and what was intended was the formalization of the real estate market. The Prime Minister's statement restored the hopes of the citizens and the market, who were waiting for the concretization of this facility.
Another three months of waiting passed, as on November 5, the Minister of Finance, Petrit Malaj, announced the government's temporary withdrawal from the revaluation of properties and the postponement of this initiative.
But are the references the real reason the government is not now undertaking property revaluation?
If such an initiative were to come into effect, it would be accompanied by an increase in the number of reassessed properties and, consequently, more money in the state budget. Currently, the government has a revenue surplus of 690 million euros in the budget, which must be spent by the end of December, which also ends the budget year. What the government does not need now are other revenues, which would increase the degree of difficulty for their spending.
Let them bring as an example the last revaluation that the government did, about two years ago. At that time, with the 3% tax, more than 162,000 properties were reassessed and the government benefited from ALL 12.7 billion or about EUR 127 million in revenue from the entire process.
The initiative was considered successful for the time and if it were to be implemented again at this moment, based on market expectations, the number of properties that would be revalued would be large and, consequently, the income that would be generated would be significant.
Property revaluation amnesties have been undertaken several times in the past and always in the pre-election periods. There have been 4 property revaluations in the last 13 years and all have taken place before local or general parliamentary elections, with rates ranging from 1% in 2011 to 3% in the last revaluation and 5% in the proposed one. to be implemented from September and which has already been postponed until next year, according to the latest government decision.
Real estate agents explain that the real estate market needs a fixed and significantly lower tax than the current one of 15% for property revaluation, similar to what is applied in other European countries. According to them, this will encourage citizens to revalue properties depending on the performance of the market and will formalize the latter, generating secure and continuous income for the government.
But, with the postponement of the revaluation process, what is expected to happen now to the real estate market and to the citizens who were waiting to revalue their low-tax properties?
The postponement of the revaluation process will serve as one more factor that will increase the pressure on the real estate market and prices. This is because the existing apartments, which need revaluation and are bought mainly by the middle class, will become more expensive. Meanwhile, the apartments in the new buildings do not need to be reassessed. However, their prices are unaffordable for this category and for the vast majority of Albanians.
Buying an apartment is becoming more and more difficult. Due to the low income of the majority of citizens, but also the performance of a market, which in the vast majority of cases is not subject to economic laws, but to dynamics with many variables. And as if this were not enough, the pressures are artificially increased by the electoral promises of the next government./ A2CNN
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