The law on property taxes regulates the three most important local taxes related to real estate in the Republic of North Macedonia: property tax, inheritance and gift tax, and real estate turnover tax. These taxes directly affect property owners, buyers and heirs.
1. Property tax
Subject to taxation
Property tax is an annual tax paid on real estate, except for those real estates that are exempt from taxation by law.
Who is a taxpayer?
Taxpayer is a natural or legal person – owner of the property. If the owner is not known or is not available, the obligee may be the usufructuary or usufructuary. In jointly owned property, each owner pays tax in proportion to his share.
Tax rate and base
The property tax rate ranges from 0.10% to 0.20% of the market value of the property. The height is determined by the council of the municipality. The basis for taxation is the market value, determined according to a prescribed methodology by an authorized appraiser.
Exemptions and reliefs
- State and municipal property used by public bodies
- Religious buildings and cultural heritage
- Agricultural land used for agricultural production
- 50% reduction for an apartment or house where the taxpayer lives with his family
2. Inheritance and gift tax
This tax is paid when inheriting or receiving property as a gift, including real estate, cash and securities, if their value exceeds the legally established limit.
Tax rates
- First line of inheritance – completely exempt from tax
- Second line of inheritance – 2% to 3%
- Third line of inheritance or unrelated persons – 4% to 5%
The basis of the tax is the market value of the inherited or gifted property, less the debts and expenses that burden the property.
3. Real estate sales tax
The real estate turnover tax is paid for every transfer of ownership of real estate, with or without compensation, between individuals and legal entities.
Who pays the tax?
As a rule, the taxpayer is the seller. However, in practice, it is usually determined by contract that the tax is paid by the buyer, which is allowed by law.
What is the rate?
The rate ranges from 2% to 4%. In the City of Skopje, it usually amounts to 3% of the market value of the real estate.
When is no tax payable?
- First sales of a new apartment with calculated VAT
- Inheritance and gifts (another tax applies)
- Expropriation and transfer between state authorities
- Introduction of real estate as an investment in the capital of a trading company
How is the tax reported and paid?
- Submission of a tax return within 15 days from the conclusion of the contract
- Delivery of purchase agreement and title deed
- Assessment of the market value by the competent municipality
- Decision on tax and payment
- Record of ownership in the Cadastre
Understanding property taxes is key for anyone buying, selling or inheriting real estate. Timely reporting and correct calculation prevent fines and administrative problems.
If you have questions or are facing a complex tax situation, it is recommended to consult a lawyer or tax advisor who will help you fulfill your obligations correctly and in a timely manner.
