Property Taxes

6/20/05
I had an interesting conversation today that I thought might be worth mentioning. Since a lot of what Co-Plan is doing in Keneta centers around legalizing ownership of property in the neighborhood, the topic of property taxes came up in conversation. Come to find out that Albania currently does not assess property taxes. When I found this out it kind of put a lot of things in perspective. Albania, I feel, can currently best be described as a country “under construction”, very much literally, and figuratively as well. Particularly in Keneta but everywhere in Albania the construction business is booming.

There are many reasons for this that I won’t take the time to go into here, but I think one of the many factors is the absence of property taxes. Without the taxes, people are able to acquire land and build without putting a whole lot of forethought into the need for the structure they are building (be it apartments, a retail store, bar, etc.) If the building sits empty for a couple of years they are not out any money because they only have to pay the up front costs to build and not taxes over the coming years. (For example, Belsh, with a population of 2,000, has at least 20 coffee bars.) The institution of property taxes here would not only significantly increase government revenue, but I think it may also curb some of the seemingly unnecessary construction that is going on everywhere around this country.

The interesting part of the conversation came when my Albanian colleague explained what he thinks is the reason for the absence of property taxes. With the privatization of state-owned land over the last 15 years, he suggests that there are many central government figures who have amassed large amounts of land wealth illegally, and that if property taxes were put into place, the true owners of many pieces of land would be revealed. Whether this is the case or not, I don’t really know, but it seems quite possible.