After withdrawing the draft in 2023, the Ministry of Finance has reinstated the draft law on the reform of the real estate tax. Starting from 2029, about 3 million buildings used for residential and commercial purposes, already registered in the Fiscal Cadastre, will be taxed according to a new formula, which will calculate the obligation on the market value of the property, and with higher rates than those currently applied.

From 0.05%, which is the rate of the residential building tax, a level in the range of 0.1 to 0.2% is proposed. The increase in the tax rate is proposed to be 100 to 300% higher than what is currently applied.

The tax level will be approved by municipal councils. For the first residence, a reduction of the taxable value of the property of up to 50% is foreseen, but the effect will depend on the value of the property, the non-taxable threshold determined for each municipality, and the tax rate that the municipal councils will approve. For the first residence, regardless of the reduction that will be applied to the value, the obligation will double if the municipal councils approve the tax rate of 0.2%.

However, according to calculations, for some owners, especially those who own high-value first residences, second properties, or buildings for commercial activities, the obligation is expected to be higher than what they pay.

One of the most important innovations of the draft law is related to the treatment of the first residence. For the first time, it is envisaged to apply a deduction from the value of the first residence at the rate of 50%, which in any case cannot exceed the maximum deduction threshold determined for the municipality where the residence is located.

In other words, a part of the value of the first residence is exempt from taxation. For low and medium-value residences (up to twice the deduction threshold), the tax will be calculated only on half of the value of the residence, causing its owner or possessor to pay half of the tax that he would pay without this facility.

For higher-value residences, only the part of the value of the residence that corresponds to the deduction threshold will be exempt from taxation, and the tax is calculated on the part of the value that exceeds this threshold.

The maximum deduction thresholds are differentiated according to the categories of municipalities, reflecting the differences that exist in the real estate market in different areas of the country,” the General Directorate of Property Tax explained to “Monitor” the new formula for calculating the property tax liability.

One of the most important changes in the real estate tax reform is related to the basis for calculating the tax. Data for 3 million real estate properties will be registered in the Fiscal Cadastre. The disposal of this data over the years was also the main reason that the Ministry of Finance withdrew from implementing the new tax after the draft was proposed in 2023.

According to the General Directorate of Property Tax, for calculating the tax, the assessed value of the property will reflect the approximate market value of that property.