Building taxation, what are the reservations about the new draft? - Free Professionals: It artificially increases prices in the market, hinders supply and demand
The draft submitted for public consultation on real estate taxation has encountered controversy over the way it was drafted and the effects it will have on the market.
Referring to a letter addressed to the Ministry of Finance, regarding the Draft Decision: "On the approval of the methodology, rules and procedures for determining the taxable value of immovable property 'buildings', the calculation of the tax on the building and its payment", the Alliance of Free Professionals emphasizes that the current draft presents several problems related to the transparency of the reference price methodology and difficulties in reflecting market reality.
According to the Alliance, the accompanying report provides that the reference prices are calculated based on transactions from 2022–2024, excluding those that "do not have economic logic" or that are below the reference level.
"The selective exclusion of transactions that mark lower prices than the reference, without a clear argumentation, tends to create a biased picture of the market and produce an artificially increasing effect on prices, violating the principle of fiscal neutrality. No guarantee is given that inflated transactions or transactions linked to illegal phenomena, such as money laundering, have been filtered out, which could further distort average prices," the letter states.
Also seen as problematic is the establishment of a floor value below which transactions are not allowed, which limits the reflection of the real market and "stops" the fall in prices, hindering the natural functioning of supply and demand.
The draft decision foresees that the price will be influenced by future development projects or strategic urban plans. “This approach carries a risk, as it uses still uncertain and unrealized projections to justify higher prices, while real market data is excluded as inappropriate. The use of uncertain expectations as price-forming factors is unfounded in economic logic and can lead to market distortion,” the analysis of the Alliance of Free Professionals states.
The provision that considers an individual who holds a unit in possession without a construction permit or ownership document, without applying for legalization, as a "user" is considered to weaken efforts to reduce informality in the construction sector and creates a perception of legitimizing the accomplished fact.
It is also estimated that the use of alternative methods for calculating tax without clear criteria may burden taxpayers due to institutional gaps and non-harmonization.
For this reason, the Alliance of Free Professionals concludes that the draft decision, in its current form, presents some uncertainties and controversial situations for the functioning of the real estate market, for legal certainty and for the principle of tax equality. It is recommended to review the problematic provisions by establishing objective, measurable and verifiable criteria, as well as clear limitations to avoid arbitrariness and distortions in the market.
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