Serbia, How much more expensive will the property tax be in 2023?

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From January 1, 2023, the citizens of Belgrade will pay higher property taxes. Namely, the councilors of the City Assembly recently adopted amendments to the Decision on the level of the property tax rate, which stipulate that the tax for natural persons for the next year can be increased by a maximum of five percent compared to the obligation from this year.

In accordance with the jump in real estate prices, there is also an increase in property taxes, and the amount of the obligation depends on the average price per square meter, the usable area of ​​the property, the age of the building and the tax rate.

How much tax citizens will pay in the territory of the capital depends on the zone and the type of real estate they own. The amount of property tax is determined based on the average price per square meter of the corresponding real estate in the zone, which is determined by the city.

With its latest decision, published in the Official Gazette of the City of Belgrade, the new average real estate prices were established, which are formed on the basis of the prices achieved in traffic. Thus, the City of Belgrade is divided into 14 zones: an extra business zone, an extra residential zone, then eight zones – from the first to the eighth, green protection zones 1 and 2, the zone of entrance directions and the zone of specific purposes.

For example, the current average price per square meter of real estate for determining the property tax for 2022 in the first extra housing zone for an apartment is 247,720 dinars, while for a house the amount is slightly lower – 232,110 dinars, and for garages and auxiliary buildings 104,560 dinars. The prices are the lowest in the so-called eighth zone, where the average price per square meter of an apartment is 43,428 dinars, of a house 35,201 dinars, and of garages and auxiliary buildings 17,902 dinars.

The extra zone includes parts of Dedinje and the Golf settlement, the first and second zones the old part of Belgrade, the city center, but also parts of Čukarica, New Belgrade and Zemun, the third wider center – Palilulu, Voždovac, Rakovica, Čukarica, more distant parts of New Belgrade, Zemun and Surčin , while the fourth and fifth zones cover the outskirts of Palilula, Zvezdara, Voždovac, Rakovica, Čukarica, Novi Belgrade, as well as the center of Obrenovac, Lazarevac and Mladenovac.

In zone six, seven and eight, there are mostly peripheral parts of the city and villages within the municipality of Palilula, Zemun (Ugrinovci), Voždovac (Rakovica village, Pinosavu and Beli potok), Čukarica (Umka, Velika Moštanica, Sremčica and Rušanj), as well as Obrenovac, Lazerevac and Mladenovac villages. There are also Surčin, Barajevo, Grocka and Sopot.

In an interview with Biznis.rs, tax advisor Đerđ Pap explains that the property tax is determined based on the market value of the real estate in the given or previous year. The decision on zones is prescribed by the local self-government and it must be made by November 30 for the following year.

“The market value is multiplied by the number of square meters of real estate and the tax is calculated on that. A five percent increase in value is certainly not a realistic reflection of the real market values ​​of real estate this year, because we all know how much prices have grown“, Pap points out.

He does not deny that there is a problem with the determination of zones, because, for example, there are properties that are very old and belong to the most expensive zones. However, he says that the regulation is such that it does not take into account the individualization of the value of individual objects.

“Changing these regulations would require a huge amount of work and the formation of an appraiser’s service that will look at every property that the owner thinks does not belong to the value determined by the local self-government. Simply, such is the regulation and the factual situation is that, for example, a house that was built 100 years ago has the same value as magnificent villas that are built in a certain location”, notes the Pope.

Our interlocutor reminds that the amount of tax is also affected by the fact that the taxpayer lives in the property he owns. If his residence is registered at that address, the property tax is reduced by 50 percent, with a maximum of 20,000 dinars.

When does the tax debt expire?

Property tax is paid quarterly, within 45 days of the beginning of the quarter, so installments are due around the 15th of the month in February, May, August and November. When it comes to the statute of limitations of this tax, Pope says that the law has defined this possibility.

“The deadline expires in five years, after the end of the year in which it should have been established. So, the tax determined in 2022 expires within five years, that is, on December 31, 2027. However, there is a so-called interruption of the limitation period. With each action of the Tax Administration, such as a reminder for tax payment or any other action, that period is interrupted and starts to run again. Also, there is a so-called absolute statute of limitations, which is ten years from the end of the year when the tax liability should have been collected”, concludes Pap, Biznis writes.