For every real estate transaction, a citizen is obliged to pay the state a tax of 15 percent, in the case of the sale of property. The proposal of the Real Estate Association is that the main house, or the one that a citizen has as his primary residence, should not be subject to such a tax. According to the Association, the scheme implemented in Italy could serve as a model.
"If we look at Italy, the first home is exempt from taxation, if you keep a home for at least 5 years. If you sell it before the 5-year period but you prove that you have lived in it for half the time, you are exempt from taxation, because you are not considered a speculator. At that moment when you do not prove these two and you will still pay tax, you should recognize the costs of renovation, the investment made in the home, and any other costs that you had since you may have taken a loan from the bank to buy it," says the President of the association Reinaldo Pipiria. In Albania, when a home registered with an initial value of 50 thousand euros is sold for 70 thousand euros, the difference of 20 thousand euros is taxed at 15% or 3 thousand euros in this case. This high tax rate, says Pipiria, stimulates informality in sales and purchases, so it should be reviewed.
"In every economic study, the high tax burden encourages a move towards informality," says Pipiria. The association's president, Reinaldo Pipiria, tells Report TV that this high tax rate is not fair as it does not recognize any maintenance costs for the apartment during its use.
"If you are a business, you receive 15% tax on profit, after recognizing expenses, while if you are an individual, you receive 15% without recognizing costs. Even if we have a lower tax of 3 or 5%, no matter how it is decided, we still think that the costs that have accompanied the maintenance of this property should be recognized," says the expert. To avoid paying the full tax, the buyer and seller agree in advance and declare a lower value of the sale of the property, causing informality to increase and the budget to lose money from hiding the real value of the sale of a house.
Taken from: Report TV
