Property tax in Belgrade rises by 5 percent

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Owners of real estate in Belgrade will receive tax bills increased by up to 5 percent from next year. The proposed decision on supplementing the decision on the property tax rate should be on the agenda of the City Assembly on Tuesday, October 25, along with three other proposals concerning the regulation of this area, which are aligned with the state of the real estate market.

In the last 12 months, real estate prices have risen in all eight zones, into which Belgrade is divided, so all those in whose name the real estate is registered will pay more money for taxes than last year. The City Assembly determined that this amount must not be higher than 5 percent, although, according to the data of the Republic Geodetic Institute, apartments and houses in Belgrade in old buildings have risen in price by about 17 percent, and in new buildings by about 13 percent. When it comes to Belgrade municipalities, the prices in the second quarter compared to the same period last year jumped the most in Palilula, as much as 27 percent in new buildings and around 18 percent in old buildings.

The councilors will also have a Proposal for a decision on determining the average price per square meter of suitable real estate in the territory of the city of Belgrade for determining property tax for 2023, a Proposal for a decision on changes to the decision on determining zones in the territory of Belgrade, as well as a Proposal for a decision on changes to the decision on determination of zones and the most equipped zones in the territory of the city for determining property taxes.

Tax advisor: Increase limited to 5 percent

Tax advisor Aleksandar Vasić and a member of the Board of Directors of the Association of Tax Advisors told Euronews Serbia that the increase in taxes in Belgrade was expected given the increase in real estate prices. He reminded that all local governments are obliged to make decisions on average prices per square meter and on zones by the end of November, so it is expected that after Belgrade, other municipalities and cities in Serbia will do the same. 

“In principle, the prices of apartments increased by an average of 5.5 and 6 percent, and houses slightly less, from 4.5 to 5 percent. This decision essentially refers to the fact that, regardless of the increase in real estate prices above 5 percent, the tax the solution will not be higher by more than 5 percent. The Property Tax Law determines the way in which the value of real estate is calculated and determines the maximum amount of the tax rate, local administrations determine whether they apply that or a lower one, and this is a privilege for citizens, regardless of if, as I said, the value of the real estate has increased, they will not pay more than 5 percent”, Vasić told Euronews Serbia.

He explained that local tax administrations will deliver solutions to taxpayers and pointed out that they are now being delivered to the home addresses of real estate owners faster and faster.

He added that the system of property tax taxation is such that, due to its fairness, in order for everyone to pay in the same way, zones have been established and different real estate values ​​are determined in them, and as much as the prices rise, so will the final tax amount. He noted that it is realistic for the tax to be higher, because the value of real estate is also higher.

The City of Belgrade has a legal obligation to pass a Decision on the level of property tax rates every year, no later than November 30, as well as to establish the average price per square meter of real estate.

Let us remind you that despite the legal obligation to adjust the amount of tax to the increase in real estate prices, the tax for 2021 has not been changed. Then the deputy mayor Goran Vesić said that this was done because of the pandemic and that it is very important that citizens are not burdened with additional costs.

“Every year, the price of a square meter is adjusted based on the average turnover. They take all the turnover in that zone in the previous year and average it. The square footage is applied to that price and we get a base, and we apply a percentage to it. It is good for the citizens that the tax last year was not increased, but not for tax theory”, Vasić believes, Euronews reports.

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