LAW OF THE REPUBLIC OF ARMENIA

of December 3, 2019 No. ZR-225

About establishment of procedure for the cadastral real estate appraisal which is brought closer to market value for the purpose of taxation on the real estate

Accepted by National Assembly of the Republic of Armenia on November 19, 2019

Article 1. Subject of regulation of the Law

1. This Law regulates procedure for the cadastral real estate appraisal which is brought closer to market value for the purpose of taxation of the real estate tax.

Article 2. Law coverage

1. Operation of this Law extends to the legal relationship which are subject to regulation for the purpose of taxation on the real estate.

Article 3. Procedure for the cadastral assessment of the parcels of land (except for lands of agricultural purpose) which is brought closer to market value for the purpose of taxation on the real estate

1. The cadastral cost of the parcels of land (except for lands of agricultural purpose), brought closer to market value, for the purpose of taxation on the real estate, is calculated by the following formula:

Сз = Szb x Pz x Kz

where:

Сз – the cadastral cost of the parcels of land (except for lands of agricultural purpose) which is brought closer to market value for the purpose of taxation on the real estate;

Сзб – basic cost of one square meter of land area (except for lands of agricultural value);

Пз – the area of the estimated parcel of land in square meters;

Кз – coefficient of zonality of space assessment (location) of the parcels of land (except for lands of agricultural purpose).

2. Basic cost of one square meter of land area (except for lands of agricultural value) (Сзб) is established in the amount of 330.000,00 (three hundred thirty thousand) of dram of the Republic of Armenia.

3. Coefficients of zonality (Кз) of space assessment (location) of the parcels of land (except for lands of agricultural purpose) are established in the following sizes:

 

Zone	Coefficient
1	1.0
2	0.65
3	0.4225
4	0.27463
5	0.17851
6	0.11603
7	0.07542
8	0.04902
9	0.03186
10	0.02071
11	0.01346
12	0.00875
13	0.00569
14	0.00370
15	0.00240
16	0.00156
17	0.00102
18	0.00066
19	0.00043
20	0.00028

 

4. Zone of space assessment (location) of the parcel of land which is the separate property unit included in more than one zone is the zone which includes more than 50 percent of the area of the parcel of land and if they are equal – the highest zone.

5. Limits of zonality of space assessment (location) of the parcels of land (except for lands of agricultural purpose), coordinates of borders and the card of zonality of space assessment are established by the Government.

Article 4. Procedure for cadastral assessment of the parcels of land (except for lands of agricultural purpose) and their improvements (except for the parcels of land of apartments of the residential apartment building, non-residential premises of the apartment building, garages located in apartment residential buildings, the structures of public and production appointment located in apartment residential buildings which are considered as improvements), brought closer to market value for the purpose of taxation on the real estate

1. The cadastral cost of the parcels of land (except for lands of agricultural purpose) and their improvements (except for the parcels of land of apartments of the residential apartment building, non-residential premises of the apartment building, garages located in apartment residential buildings, the structures of public and production appointment located in apartment residential buildings which are considered as improvements), brought closer to market value for the purpose of taxation on the real estate is calculated by the following formula:

N = Nz + Nzd

where:

N – the cadastral real estate value which is brought closer to market value for the purpose of taxation on the real estate;

Нз – the cadastral cost of the parcels of land (except for lands of agricultural purpose) which is brought closer to market value for the purpose of taxation on the real estate;

Nzd – the cadastral cost of improvements of the parcels of land (except for the parcels of land of apartments of the residential apartment building, non-residential premises of the apartment building, garages located in apartment residential buildings, the structures of public and production appointment located in apartment residential buildings which are considered as improvements) which is brought closer to market value for the purpose of taxation on the real estate.

The cadastral cost of the parcels of land (except for lands of agricultural purpose) which is brought closer to market value for the purpose of taxation on the real estate (Нз) is calculated according to the procedure, the stipulated in Clause 3 presents of the Law.

The cadastral cost of improvements of the parcels of land (except for the parcels of land of apartments of the residential apartment building, non-residential premises of the apartment building, garages located in apartment residential buildings, the structures of public and production appointment located in apartment residential buildings which are considered as improvements) which is brought closer to market value for the purpose of taxation on the real estate is calculated by the following formula:

Nzd = { (H1 + H2 + … + Hn) + (Nbs x Knp x Software x Kip) + (Nbs x Kno x Po x Kyo) } x Kts x Kz

where:

N 1, H2, … Hn – costs of the first, second and following floors (including the cellar, semi-basement, penthouse (the garret floor);

Нбс – basic cost of square meter of the area of structure (on internal dimensions);

Knp – coefficient of availability of coverings, canopies;

Software – the area of coverings, canopies in square meters;

Kip – the coefficient characterizing depreciation (operation duration) of coverings, canopies;

Kno – coefficient of availability of fencings;

On – the area of basis of fencings in square meters;

Kyo – the coefficient characterizing depreciation (operation duration) of fencings;

Кц – coefficient of purpose of structure;

Кз – coefficient of zonality of space assessment (location) of structure.

H1, H2, costs … are calculated by Hn by the following formula:

Hn = Nbs x Ps x Kvm x Ks x KP x Kk x Quo x Kv x Ke x Kpod x Kpov x Ki

where:

Нбс – basic cost of square meter of the area of structure (on internal dimensions);

Пс – the area of structure (except for coverings, canopies and fencings) (on internal dimensions) in square meters;

Kvm – the coefficient connected with structure construction material type;

Кс – the coefficient characterizing degree of completeness of structure;

KP – coefficient of type of interfloor covering of structure;

Кк – structure roof material coefficient;

Quo – the coefficient connected with external finishing of structure;

KV – structure height coefficient (on internal dimensions);

Ke – coefficient of number of storeys of structure;

Kpod – coefficient of subsidiary structure;

Kpov – the coefficient characterizing damage degree;

Ki – the coefficient characterizing depreciation (operation duration) of structure.

2. For the purpose of calculation of cadastral cost of improvements of the parcels of land (except for the parcels of land of apartments of the residential apartment building, non-residential premises of the apartment building, garages located in apartment residential buildings, the structures of public and production appointment located in apartment residential buildings which are considered as improvements), brought closer to market value for the purpose of taxation on the real estate:

1) basic cost of square meter of the area of structure (on internal dimensions) (Нбс) is established 700.000,0 (seven hundred thousand) of dram of the Republic of Armenia;

2) the coefficient connected with structure construction material type (except for coverings, canopies and fencings) (Kvm) is established:

 

for frame, stone structure (including from brick or small hollow blocks)	0.6
for large-panel and large-block structure	0.5
for structure from other materials	0.48

 

3) the coefficient of availability of coverings, canopies (Knp) is established:

 

in the absence of coverings, canopies	0
in the presence of coverings, canopies	0.18

 

4) the coefficient of availability of fencings (Kno) is established:

 

in the absence of fencings	0
for stone, other fencings on concrete basis	0.035
for steel concrete fencings	0.015

 

5) the coefficient of purpose of structure (Кц) is established:

 

for structures of residential purpose	1.0
for structures of public appointment	1.4
for structures of production appointment	0.75

 

6) coefficients of zonality of space assessment (location) of structure (Кз) it is established in the following sizes:

 

Zone	Coefficient
1	1.0
2	0.85
3	0.7225
4	0.6141
5	0.5220
6	0.4437
7	0.3771
8	0.3206
9	0.2725
10	0.2316
11	0.1969
12	0.1673
13	0.1422
14	0.1209
15	0.1028
16	0.0874
17	0.0743
18	0.0631
19	0.0536
20	0.0456

 

7) the coefficient characterizing degree of completeness of structure (Кс) is established:

 

for structure with degree of completeness of 0-50 percent (inclusive)	0.5
for structure with degree of completeness 51-80 (inclusive)	0.7
for structure with degree of completeness 81 and more than a percent	0.75

The coefficient characterizing completeness degree, established by this Item is not applied to the structures of public and production appointment which are under construction in the settlements other than the border settlements included in the list established by the Government and also to the private apartment houses which are under construction in administrative borders of the city of Yerevan which term of the construction license expired or was prolonged. In the cases specified in this paragraph, the coefficient characterizing completeness degree is established by 1.0.

8) the coefficient of type of interfloor covering of structure (KP) is established:

 

for steel concrete covering	1.0
for covering from tree or other material	0.85

 

9) the coefficient of material of roof of structure (Кк) is established:

 

for tile roof	1.0
for roof from tin and other water insulating materials	0.9
for roof from slate	0.8

 

10) the coefficient connected with external finishing of structure (Quo) is established:

 

for the structure which does not have external finishing	1.0
for each plastered facade of the structure having external finishing	1.01
for each hewn, revetted, glazed facade of the structure having external finishing	1.04

 

11) the structure height coefficient (on internal dimensions) is established (KV):

 

for floors 0-2.6 meters high (inclusive)	0.9
for floors 2.61-2.9 meters high (inclusive)	0.95
for floors 2.91-3.5 meters high (inclusive)	1.0
for floors 3.51-5.0 meters high (inclusive)	1.15
for structures with floors 5.1-8.0 meters high (inclusive)	1.4
for structures with floors 8.1-12.0 meters high (inclusive)	1.8
for floors more than 12.1 meters high	2.3

 

12) the coefficient, numbers of storeys of structure (Ke), is established:

and. for structures of residential purpose:

 

for the first and following floors	1.0
for the semibasement floor, penthouse (the garret floor)	0.8
for basement store	0.65

 

. for structures of public and production appointment:

 

for the first floor	1.0
for the second and following floors, semibasement floor, penthouse (garret floor)	0.8
for basement store	0.65

 

13) the coefficient connected with subsidiary structure (KP) is established:

 

for subsidiary structures, garages in case of the main structures of residential appointment	0.5
for subsidiary structures, garages in case of structures of public and production appointment	1.0

 

14) the coefficient characterizing degree of damage of structure (Kpov) is established:

 

for structures with zero degree of damage	1.0
for structures with I and II degrees of damage	0.96
for structures with III degree of damage	0.7
for structures with the IV degree of damage	0

 

15) the coefficient characterizing depreciation (operation duration) of structure (Ki), coverings, canopies (Piles) and fencings (Kyo) is established:

 

for structures, coverings, canopies and fencings lasting operation of 1-9 years (inclusive)	1.0
for structures, coverings, canopies and fencings lasting operation of 10-15 years (inclusive)	0.98
for structures, coverings, canopies and fencings lasting operation of 16-21 year (inclusive)	0.96
for structures, coverings, canopies and fencings lasting operation of 22-27 years (inclusive)	0.94
for structures, coverings, canopies and fencings lasting operation of 28-33 years (inclusive)	0.91
for structures, coverings, canopies and fencings lasting operation of 34-39 years (inclusive)	0.86
for structures, coverings, canopies and fencings lasting operation of 40-45 years (inclusive)	0.81
for structures, coverings, canopies and fencings lasting operation of 46 and more years (inclusive)	0.76

 

3. The cadastral real estate value which is brought closer to market value for the purpose of taxation on the real estate is created only for the whole property unit. Each unit of structure which is part property unit irrespective of its functional purpose, is estimated according to the procedure of assessment, established by this Law.

4. The facade of structure is considered glazed if more than fifty percent of total area of front part of structure it is glazed.

5. The coefficient connected with material of roof of structure (Кк) is applied to assessment of the last floor of structure.

6. In case of assessment of open reservoirs and pools in case of structures as coefficient of type of interfloor covering of structure (KP) the coefficient "1.0" established for steel concrete covering is applied, and as coefficient of material of roof of structure (Кк) the coefficient "1.0" established for tile roof is applied.

7. Open stadiums, sports grounds, playgrounds, tennis courts are estimated according to the procedure of assessment of coverings, canopies.

8. In case of assessment of structures of production appointment as coefficient of external finishing the coefficient "1.0" established for the structure which does not have external finishing is (Quo) applied.

9. Assessment of platforms, retaining walls for the purpose of taxation on the real estate is not carried out.

10. In case of assessment of basement stores as the coefficient connected with external finishing of structure (Quo) the coefficient "1.0" established for the structure which does not have external finishing is applied.

11. In case of assessment of unfinished structures as the coefficient characterizing depreciation (operation duration) of structure (Ki) the coefficient "1.0" established for structure lasting operation of 1-9 years (inclusive) is applied.

12. The coefficient characterizing degree of damage of structure (Kpov) is applied in case of the conclusion issued in connection with technical condition of structure according to the procedure, established by the legislation of the Republic of Armenia.

13. Limits of zonality of space assessment (location) of structure, coordinate of borders and the card of zonality of space assessment are established by the Government.

14. The list of classification of purpose of structures establishes the Government.

Article 5. Procedure for the cadastral assessment of apartments of the residential apartment building, non-residential premises of the apartment building, the garages located in apartment residential buildings, the structures of public and production appointment located in apartment residential buildings which is brought closer to market value for the purpose of taxation on the real estate

1. The cadastral cost of apartments of the residential apartment building, non-residential premises of the apartment building, the garages located in apartment residential buildings, the structures of public and production appointment located in apartment residential buildings, brought closer to market value for the purpose of taxation on the real estate, is calculated by the following formula:

N = Nbs x Ps x Kvm x Ks x KP x Kv x Ke x Kpov x Ki x Kts x Kz

where:

Нбс – basic cost of square meter of the area of structure (on internal dimensions);

Пс – the area of structure (on internal dimensions) in square meters;

Kvm – the coefficient connected with structure construction material type;

Кс – the coefficient characterizing degree of completeness of structure;

KP – coefficient of type of interfloor covering of structure;

KV – structure height coefficient (on internal dimension);

Ke – coefficient of number of storeys of structure;

Kpov – the coefficient characterizing degree of damage of structure;

Ki – the coefficient characterizing depreciation (operation duration) of structure;

Кц – coefficient of purpose of structure;

Кз – coefficient of zonality of space assessment (location) of structure.

2. For the purpose of calculation of the cadastral cost of apartments of the residential apartment building, non-residential premises of the apartment building, the garages located in apartment residential buildings, the structures of public and production appointment located in apartment residential buildings which is brought closer to market value for the purpose of taxation on the real estate:

1) the coefficient connected with material type of construction of structure (Kvm) is established:

 

for frame structure	1.0
for stone structure (including from brick or small hollow blocks)	0.95
for large-panel and large-block structure	0.9

 

 

2) the coefficient characterizing degree of completeness of structure (Кз) is established:

 

for structure with degree of completeness of 0-50 percent (inclusive)	0.5
for structure with degree of completeness 51-80 (inclusive)	0.7
for structure with degree of completeness 81 and more than a percent	1.0

The coefficient characterizing completeness degree, established by this Item is not applied to the structures which are under construction in the settlements other than the border settlements included in the list established by the Government which term of the construction license expired or was prolonged. In the cases specified in this paragraph, the coefficient characterizing completeness degree is established by 1.0.

3) the coefficient of type of interfloor covering of structure (KP) is established:

 

for steel concrete covering	1.0
for wooden covering	0.85

 

4) the structure height coefficient (on internal dimensions) is established (KV):

 

for floors 0-2.6 meters high (inclusive)	0.9
for floors 2.61-2.89 meters high (inclusive)	0.95
for floors 2.9 meters high and more	1.0

 

12) the coefficient, numbers of storeys of structure (Ke), is established:

and. for structures of residential purpose:

 

for the second, third and fourth floors	1.0
for the first and following floors (except for the second, third and fourth)	0.98
for the last floor in addition	0.95
for the semibasement floor, penthouse (the garret floor)	0.8
for basement store	0.65

 

. for structures of public and production appointment:

 

for the first floor	1.0
for the second and following floors, semibasement floor, penthouse (garret floor)	0.8
for basement store	0.65

 

6) the coefficient characterizing degree of damage of structure (Kpov) is established:

 

for structures with zero degree of damage	1.0
for structures with I and II degrees of damage	0.96
for structures with III degree of damage	0.7
for structures with the IV degree of damage	0

 

7) the coefficient characterizing depreciation (operation duration) of structure (Ki) is established:

 

for structures lasting operation of 1-9 years (inclusive)	1.0
for structures lasting operation of 10-15 years (inclusive)	0.98
for structures lasting operation of 16-21 year (inclusive)	0.96
for structures lasting operation of 22-27 years (inclusive)	0.94
for structures lasting operation of 28-33 years (inclusive)	0.91
for structures lasting operation of 34-39 years (inclusive)	0.86
for structures lasting operation of 40-45 years (inclusive)	0.81
for structures lasting operation of 46 and more years (inclusive)	0.76

 

8) the coefficient of purpose of structure (Кц) is established:

 

for structures of residential purpose	1.0
for structures of public appointment	1.4
for structures of production appointment	0.75

 

9) coefficients of zonality of space assessment (location) of structure (Кз) it is established in the following sizes:

 

Zone	Coefficient
1	1.0
2	0.85
3	0.7225
4	0.6141
5	0.5220
6	0.4437
7	0.3771
8	0.3206
9	0.2725
10	0.2316
11	0.1969
12	0.1673
13	0.1422
14	0.1209
15	0.1028
16	0.0874
17	0.0743
18	0.0631
19	0.0536
20	0.0456

 

10) basic cost of one square meter of the area of structure (to internal measures) (Сбс) is established in the amount of 700.000,0 (seven hundred thousand) of dram of the Republic of Armenia.

3. The cadastral real estate value which is brought closer to market value for the purpose of taxation on the real estate is created only for the whole property unit. Each unit of structure which is part property unit irrespective of its functional purpose, is estimated according to the procedure of assessment, established by this Law.

4. In case of assessment of unfinished structures as the coefficient characterizing depreciation (operation duration) of structure (Ki) the coefficient "1.0" established for structures lasting operation of 1-9 years (inclusive) is applied.

5. Car parks and autoparkings of the apartment residential building are estimated according to the procedure of assessment of the garages located in apartment residential buildings.

6. The coefficient characterizing degree of damage of structure (Kpov) is applied in case of the conclusion issued in connection with technical condition of structure according to the procedure, established by the legislation of the Republic of Armenia.

7. Limits of zonality of space assessment (location) of structure, coordinate of borders and the card of zonality of space assessment are established by the Government.

Article 6. General provisions

1. Concepts of the terms used in this Law are identical to concepts, used in article 227 of the Tax Code of the Republic of Armenia.

2. The prices calculated according to the procedure of the cadastral assessment of the parcels of land (except for lands of agricultural purpose) which is brought closer to market value for the purpose of taxation on the real estate, the stipulated in Clause 3 presents of the Law form the basis for the selling or minimum starting prices in alienation cases (direct sale or sale at auction), leases, provisions with the right of building of the parcels of land which are the state-owned or municipal property.

3. To the alienation prices (direct sale or sale at auction) the agricultural production facilities which are the state-owned or municipal property, the objects except for overworking, lands allocated for construction and servicing the additional subtracting coefficient 0.6 is applied.

4. The prices calculated in the stipulated in Clause 3 presents of the Law procedure for the cadastral assessment of the parcels of land (except for lands of agricultural purpose) which is brought closer to market value for the purpose of taxation on the real estate in the cases established by parts 9, of the 10 and 12 Article 64 of the Land code of the Republic of Armenia are the basis for payment of cadastral cost of the parcel of land, since January 1, 2022.

Article 7. Transitional provisions

1. In a month after entry into force of this Law Government establishes limits of zonality of space assessment (location) of the parcels of land (except for lands of agricultural purpose) the Republic of Armenia and structures, the coordinate of borders and the card of zonality of space assessment.

2. From the date of entry into force of this Law to declare Appendix 1 to Section 11 of the Tax code of the Republic of Armenia of October 4, 2016 invalid.

3. Sale of the parcels of land based on the decisions on direct sale of the parcels of land made by the head of community according to requirements of the Land code till December 31, 2020 is made at the cadastral cost operating at the time of adoption of this decision.

4. In case of acceptance by the head of community of the favorable administrative act based on statements for direct sale of the parcels of land which are the state-owned or municipal property, given to the head of community citizens or legal entities till December 15, 2020, sale of the parcels of land is made at the cadastral cost operating till December 31, 2020.

5. In case of adoption of the favorable administrative act about change in accordance with the established procedure of purpose of the parcel of land based on the application submitted by the owner of the parcel of land to the head of community till December 15, 2020 if change is resulted by the requirement about payment of difference of cadastral costs of the parcel of land, calculation of difference of cadastral costs of the parcel of land is made at the cadastral costs operating till December 31, 2020.

6. To the agreements signed according to resolutions on alienation in the form of direct sale of the structures which are state-owned property and the parcels of land allocated for them, the accepted Government till December 31, 2020, applies requirements of the legislation existing at the time of adoption of the order of the Government.

7. In case of acceptance by the head of community of the favorable administrative act based on statements for legalization of unauthorized constructions on the parcels of land belonging to citizens or legal entities by the property right, and also in the apartment or subdivided buildings given to the head of community till January 31, 2021 the coefficients operating till December 31, 2020 are applied to payment for legalization of unauthorized constructions.

8. Legalized unauthorized constructions on the parcels of land which are the state-owned or municipal property, and the parcels of land allocated for them in accordance with the established procedure are alienated on the selling prices operating till December 31, 2020 if the head of community based on the application for legalization of unauthorized construction submitted till January 31, 2020 adopts the favorable administrative act.

9. In case of appeal judicially of refusals in direct sale of the parcels of land which are the state-owned or municipal property based on the applications submitted by citizens or legal entities till December 15, 2020 and also in legalization of unauthorized constructions - till January 31, 2021, and in the presence of the court resolutions which took legal effect about compulsion of the head of community by court to adoption of the favorable administrative act sale of the parcels of land is made at the cadastral cost operating till December 31, 2020, and unauthorized constructions and the parcels of land allocated for them in accordance with the established procedure are alienated on the selling prices operating till December 31, 2020.

Article 8. Entry into force of the Law

This Law becomes effective since January 1, 2021.

 

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