Circular No.105/S1 issued by the Ministry of Finance on 15/01/2020 (hereinafter), has modified the direct estimations subject to the property tax for dwellings occupied by non-tenants and non-occupied dwellings as of 01/01/2019.
Whereas the decision No. 616/1 dated 08/20/2019 relating the modification of direct estimations subject to the property tax for dwellings occupied by non-tenants has provided for a 20% decrease of the estimations that occurred as of 01/01/2015 until 31/12/2018 in order to cope with the urgent increase of real estate prices which was marked by a general nature and thus, in accordance with article 39 of the Law relating to the property tax which provides that the effect of direct estimations could be extended for a period of three years by virtue of a decision issued by the Minister of Finance in case of a stable economic situation and stability of rents. However, according to said article, insofar as the urgent change in economic conditions is of a general nature, the extension could be extended and the previous estimations could be adjusted on the basis of general rates.
Besides, it should be mentioned that article 36 of the Property Tax Act stipulates that in order to estimate the net income, the following principles should be taken into account:
1- The value of the rent agreed upon by the lessor and the lessee should be adopted as the basis of estimation, whenever such value could be known and validated.
2- Failing that, the net income is estimated in comparison to other similar leased buildings under similar circumstances.
3- In case of failure of comparison, the estimations of the net income should be effected on the basis of the basic elements affecting the property’s rental value: surface area, region, condition of the building, building complements as well as on the basis of other elements; provided that the building guarantees its owner at least 5% (five percent) of its value as a rent.
This being said, the financial units in charge of the property tax are required to maintain the decrease of 20% for the estimations occurred as of 01/01/2019 in parallel with the decreased estimations that occurred as of 01/01/2015 until 31/12/2018 for dwellings occupied by non-tenants as well as for non-occupied dwellings.