Azerbaijan, Baku / corr Trend U.Ismayilova / The application of a new taxation system for construction companies in Azerbaijan will result in increase of prices at real estate market, Gubad Ibadoglu, the head of the Economic Researches Center of Azerbaijan, said on 23 August.
"Increase in taxes will lead to increase of expenses on the new buildings and it will indeed affect real estate prices," Ibadoglu said.
The Cabinet of Ministers is currently considering new co-efficiencies in the system of taxation of the construction companies. Following their approval they will be applied in a new system of taxation of construction.
After the application of a new system the local construction companies will pay AZN 10 per sq m and the co-efficiency will be applied with the consideration of placement of the building. The co-efficiency will equal AZN 50 and will fluctuate depending on the place of the block of flats is located.
This tax payment system for construction companies has been applied for the term of 2 years in the rate of 12.5% of total tax payments per quarter. It is planned establish the total amount of payments which will be divided into 8 equal parts to be paid within two years.
Ibadoglu said that low-incomes families will indeed suffer from increase of real estate prices.
Average price of flats in Baku was $86,500 per one in July.