Azerbaijan, Baku, June 11 / Trend, E. Aliyev /
Raising tax rates on real estate in Azerbaijan at this stage may negatively affect the real estate market, Deputy Minister of Taxes Sahib Alekperov told journalists on Monday.
"This is a very difficult topic. As you know, the tax revenues from the property are minimal.
Potentially, this amount may be very large. In some countries revenues from property taxes account for up to half of all revenues. But application of such practice in Azerbaijan may negatively affect the real estate market. The real estate market in Azerbaijan has just begun to form. As the National Leader of Azerbaijan Heydar Aliyev noted, we should not hurry in this matter, "Alekperov said.
According to him, some countries have introduced similar taxes, and achieved nothing.
"I can give the examples of Kazakhstan and the Russian Federation. First of all it is necessary that a certain environment got formed among the real property owners, and attracting the property owner to the payment of the tax is very simple," Alekperov said.
He also added that the real estate is not a form of property that can be hidden.
"Anyway, it is the question of distant future, rather than of one or two years. Application of such a practice now will lead to the distribution of the real estate market on a very limited number of owners, which is unacceptable," the deputy minister added
According to the changes to the Tax Code of Azerbaijan, which were adopted at the end of last year and came into force from January 2013, during the taxation of operations on real estate rents in Azerbaijan its market cost is taken as a basis. It means that, the owner can rent it out at any cost, but this should not affect the amount of the tax needing to be paid.The tax rate on income from rent of the property is 14 percent.
According to the Tax Code of Azerbaijan, real estates of legal and natural persons is imposed to property tax. If the value of the property is less than five thousand manats, then it is not taxable. However, if the value exceeds this amount, it will be subject to taxation. According to the demand of the Tax Code, businessmen and legal entities must pay an annual tax of one percent of the value of their real estate. For individuals, the tax rate on real estate is 0.1 percent of the property value. The municipalities are engaged in the collection of property tax from natural persons.
The official exchange rate on June 11 is 0,7848 AZN / USD.