Tax incentive on revaluation of immovable property

21. July 2020

The deadline for the revaluation of immovable property has been extended from 30.09.2020 to 31.12.2020.

This law, which entered into force on 14.01.2020 for a limited period, gives the right to revalue the property at market value to all individuals who own immovable properties, as well as those who own immovable property in registration process. Besides the individuals, legal entities that own immovable properties will have the right to make a revaluation of the immovable property.

Revaluation by individuals

The tax that individuals will pay for registering this revaluation is 3% of the difference between the revalued amount as above and the value of property of the previously registered act or the previously revaluated value (for which tax has been paid earlier). The revalued amount will thus serve as a basis for calculating the realized gain in the case of a transfer of the ownership of the immovable property in the future, a gain that will be taxable at the moment of transfer with the effective rate (the existing rate in
force: 15%).

Revaluation by legal entities

Legal entities are entitled to reevaluate their immovable properties at market value through an expert act issued by a licensed independent expert. Legal entities will have to pay 5% of the difference between the revalued amount and the registered carrying amount of the immovable property. The difference between the revalued amount and the carrying amount shall not be depreciated for tax purposes.

The extension of the deadline was published in the Official Gazette no.136, dated 21.07.2020, Law no. 91/2020 “On some amendments in Law no. 90/2019 “On revaluation of immovable property””.

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