Under normal market conditions, extending the taxable value update period (from 3 to 5 years) would be a benefit for companies.

However, given that we are going through a period of sharp price increases, it is very possible that construction materials and labor will become even more expensive. This increase will be directly reflected in the taxable value of buildings because this is determined by authorized appraisers based on cost catalogs that are periodically updated to reflect the real level of costs.

As a result, I recommend that members have their heritage buildings assessed on December 31, 2021, as the taxable value will take into account 2021 prices, thus eliminating the risk of paying a much higher tax starting in 2024.

For example, in just one year, between June 2020 and June 2021, the price of concrete increased by 12.2%, that of steel reinforcement by 17.5%, that of cement by 11%, that of copper by 33.2%, and that of wood by 38.9%. The data is valid for the Romanian market.

The main advantages of the assessment for taxation as of December 31, 2021 are:

– Companies will benefit from a 5-year validity of the evaluation report starting in 2022 and will have predictability over the budget allocated for building taxes and fees for the next 5 years.

– The building tax will remain at the same level for the 5 years, as it will take into account the current costs of construction materials and labor. In determining the taxable value of a building, the greatest impact is given by the new cost to build that building. From the experience of previous years, new costs have increased each year in an accelerated manner due to inflation, the increase in the cost of labor in the construction field and the increase in the price of construction materials and utilities.

The valuation of buildings to determine the taxable value can be considered an additional cost element, but the impact on a company's budget is incomparably lower than that of an increased annual tax due to rising construction prices.

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Article appeared in: https://www.rbls.ro/valoarea-impozabila-a-cladirilor-va-creste-cum-puteti-evita-plata-unui-impozit-marit/