Property Tax Kosovo screen dump

One of the goals of the project is to build fair and equal treatment of property tax payers throughout Kosovo.

Photo: Sida

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Improved Property Tax Collection in Kosovo

Updated: 22 August 2014

A new property tax system is implemented in Kosovo, generating substantially increased income to the municipalities. The Swedish Tax Authority has been involved in the implementation together with Kosovo’s Ministry of Economy and Finance.

After the conflict of 1999 in Kosovo, a pilot programme was started for the collection of tax on immovable property.  Municipalities were authorised to collect and use the property tax, which now has become one of the major sources of income for the municipalities.

In 2006, property tax collected by the municipalities constituted only 1 per cent of the total government revenue. There were a number of reasons why the tax was not collected; the bills did not reach the right persons and the authorities failed to treat appeals from people claiming to be unfairly treated.

In October 2008 an agreement was signed with Kosovo’s Ministry of Economy and Finance. The Swedish Tax Authority (STA) was engaged in the implementation. The aim is to substantially increase municipal income from property tax, to build an effective property tax administration in every municipality and fair and equal treatment of property tax payers throughout Kosovo.

The project has focused on five processes; Taxation, Surveillance, Appraisal, Collection and Supporting processes.

The new taxation process was successfully implemented in January 2011. Taxation of the whole country has previously taken months and has resulted in high number of erroneous bills. Now the whole taxation process take only days and results in very few incorrect bills.

An appraisal process has been developed with a new valuation model. This has led to a fairer appraisal. The poorest buildings have had a 50 per cent decrease in its taxable value, while buildings of high quality have had an increase of 10 per cent.

The property tax project has created a website  that is updated regularly and where the taxpayers can get all necessary information, including the 'where' and 'for what' their tax money has been invested in by their municipality. The property tax payers are informed regularly through TV and radio, billboards and brochures.

Today the progress of property tax revenues continues to be positive. Presuming that collection for the second part of 2011 will be the same as for the 2010 outcome, the sum  will amount to € 14.2 million, which is very close to the original target outcome of € 14.3 million. The yearly impact of the project can thus be estimated to € 6 million.

The project will be completed in December 2011.

Page owner: Department for Europe and Latin America

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