Armenian opposition slams proposed upward revision of property taxes
24.06.2020,
16:58
Armenian parliament was considering today a set of amendments to the Tax Code in the first reading, which call for an upward revision of property taxes.
YEREVAN, June 24. /ARKA/. Armenian parliament was considering today a set of amendments to the Tax Code in the first reading, which call for an upward revision of property taxes.
According to Deputy Minister of Finance Arman Poghosyan, the main problem today is the discrepancy between the market and cadastral value of real estate. He said property taxes constitute now only 0.2% of GDP while in other countries this indicator is many times higher. In the neighboring Georgia it is 1.1%, in Russia - 1.2%, and in developed countries - 2-2.5%.
He said the proposed changes remove the tax-free threshold bringing 275 thousand apartments and 285 thousand privately-owned homes to the tax net. The revised taxation is to come into force by phases starting from January 1, 2021 and will take 4 years. This is done to avoid a sharp increase in the tax burden of households.
According to the changes, the taxes will range from 0.5% to 15% of the property value depending on the type of property, including agricultural and other types of land. The proposed changes were slammed by the opposition Bright Armenia Party.
According to its lawmaker Gurgen Baghdasaryan, they will not solve many problems, including the problems of unused spaces and buildings that are attractive for investment.
"You have targeted the rich, but that will not help, because in the center of Yerevan there are a lot of expensive apartments that fall under high taxation rate and which belong to mostly senior people of art and culture who are not capable of paying high taxes," Baghdasaryan said.
Mane Tandilyan from the same party described the changes 'shameful', especially given the coronavirus pandemic.
She said there must be a non-taxable threshold of up to 10 million drams, and the rates should be halved for the middle layer, and be higher the rich. For example, for a real estate worth 200 million drams the property taxation rate must be .5%. "It is unacceptable to put additional pressure on the population," she said.
However, Babken Tunyan from the ruling My Step bloc argued that the proposed changes are not so 'scary', since for the main part of the population the tax will decrease.
“If the market value of your real estate today is 30 million drams, you pay by the cadastral value about 2500 drams per year. In 2021, taking into account the cadastral value of housing, you would pay 43 thousand drams, while according to the proposed amendments, you will pay 19 thousand drams, including 4,500 drams in the first year," said Tunyan.
He also noted that pensioners will not suffer, since they will be allowed not to pay the tax that will accumulate, and will be paid only if the apartment is sold.
Deputy Minister Arman Poghosyan added that for real estate worth up to 10 million drams, the tax will increase by only 2.9 thousand drams, and for real estate worth over 100 million drams it will increase by 492 thousand drams or 160-165 times.
According to authorities, the amount of to be collected real estate taxes will grow from 9 billion drams to 40 billion drams. ($1 - 479.99 dram) -0-
According to Deputy Minister of Finance Arman Poghosyan, the main problem today is the discrepancy between the market and cadastral value of real estate. He said property taxes constitute now only 0.2% of GDP while in other countries this indicator is many times higher. In the neighboring Georgia it is 1.1%, in Russia - 1.2%, and in developed countries - 2-2.5%.
He said the proposed changes remove the tax-free threshold bringing 275 thousand apartments and 285 thousand privately-owned homes to the tax net. The revised taxation is to come into force by phases starting from January 1, 2021 and will take 4 years. This is done to avoid a sharp increase in the tax burden of households.
According to the changes, the taxes will range from 0.5% to 15% of the property value depending on the type of property, including agricultural and other types of land. The proposed changes were slammed by the opposition Bright Armenia Party.
According to its lawmaker Gurgen Baghdasaryan, they will not solve many problems, including the problems of unused spaces and buildings that are attractive for investment.
"You have targeted the rich, but that will not help, because in the center of Yerevan there are a lot of expensive apartments that fall under high taxation rate and which belong to mostly senior people of art and culture who are not capable of paying high taxes," Baghdasaryan said.
Mane Tandilyan from the same party described the changes 'shameful', especially given the coronavirus pandemic.
She said there must be a non-taxable threshold of up to 10 million drams, and the rates should be halved for the middle layer, and be higher the rich. For example, for a real estate worth 200 million drams the property taxation rate must be .5%. "It is unacceptable to put additional pressure on the population," she said.
However, Babken Tunyan from the ruling My Step bloc argued that the proposed changes are not so 'scary', since for the main part of the population the tax will decrease.
“If the market value of your real estate today is 30 million drams, you pay by the cadastral value about 2500 drams per year. In 2021, taking into account the cadastral value of housing, you would pay 43 thousand drams, while according to the proposed amendments, you will pay 19 thousand drams, including 4,500 drams in the first year," said Tunyan.
He also noted that pensioners will not suffer, since they will be allowed not to pay the tax that will accumulate, and will be paid only if the apartment is sold.
Deputy Minister Arman Poghosyan added that for real estate worth up to 10 million drams, the tax will increase by only 2.9 thousand drams, and for real estate worth over 100 million drams it will increase by 492 thousand drams or 160-165 times.
According to authorities, the amount of to be collected real estate taxes will grow from 9 billion drams to 40 billion drams. ($1 - 479.99 dram) -0-
