AKM warns: Property tax for businesses could increase by over 200%
The executive director of the Association of Kosovo Municipalities, Sazan Ibrahimi, has warned of a significant increase in property tax for commercial properties, as a result of the implementation of the progressive rate foreseen by the current law.
According to him, bills for some businesses could multiply, jeopardizing liquidity and investments.
"Property taxes for commercial properties could increase drastically next year, in some cases by over 200 percent," Ibrahimi stated.
He emphasizes that this increase is not related to residential properties, but exclusively to properties used for economic activities.
"We are talking about commercial properties and businesses. With the full implementation of the progressive property tax rate, the bills for some businesses could increase manifold, in some cases even over 200 percent," Ibrahimi said, IndeksOnline.
According to him, the increase in property taxes constitutes a direct cost for manufacturing, commercial and service businesses, negatively affecting liquidity, the possibility of new investments and, potentially, even jobs or prices for consumers.
He also gave concrete examples to illustrate the impact. Ibrahimi predicts that a commercial property worth around 7 million euros, from around 11-12 thousand euros in tax this year, could face a bill of over 26 thousand euros per year. For a property worth around 20 million euros, the tax could increase from around 34 thousand euros to over 90 thousand euros. While for commercial properties worth around 50 million euros, the annual bill could reach over 240 thousand euros.
"These are very serious amounts for any business, especially for those operating in difficult economic conditions," he added.
According to Ibrahimi, although businesses are addressing their concerns to municipalities, the progressive tax rate stems from a law approved at the central level, not from municipal decisions. He says that municipalities were not consulted during the drafting of this law, which has prompted continued reactions from the AKM.
"The AKM Board has been requesting amendments to the Law on Property Tax for years. The position of the majority of mayors is clear: the tax should be more affordable for citizens and businesses, taking into account the economic reality in Kosovo," he emphasized.
The tax increase was scheduled to take effect in 2025, but its implementation was suspended through the 2025 Budget Law, in order to pave the way for legal changes. However, according to Ibrahim, the process has remained blocked due to the dysfunction of central institutions.
As a short-term solution, he mentions the legal possibility for the Ministry of Finance, Labor and Transfers to postpone the issuance of property tax invoices until March 31 of the coming year.
"This would create space for serious economic impact analysis and full consultation with municipalities and businesses," Ibrahimi said, calling for concrete actions from the central level.IndeksOnline/
