A residential property pricing committee is in the works: The Finance Ministry is considering establishing a specialized pricing committee to determine market values and set rental benchmarks for residential properties, a government source told EnterpriseAM. The committee’s price guides, which are set to be published in the Official Gazette, will serve as the basis for calculating property taxes.

Who’s on the committee? The committee will include the finance minister, the head of the Real Estate Tax Authority, and representatives from the housing, justice, and local development ministries. Valuation experts may also join the committee.

Valuations will be simplified: Taxes will be calculated based on a property value, avoiding the disputes that have long surrounded property valuations, our source said. The current method relies on a complex formula that uses the property’s estimated capital value minus tax exemptions to calculate expected rental income — an approach that has resulted in frequent legal appeals. The valuation process will be handled by certified appraisers approved by the Financial Regulatory Authority.

The changes would also scrap caps on how much a property’s assessed value — and therefore its tax — can increase following a reassessment. Current caps stand at 30% for residential properties and 45% for non-residential units.

This comes as part of amendments to the property tax approved by cabinet in May. The draft law includes a clause exempting taxpayers from tax if the property cannot be utilized due to emergency circumstances or demolition, a cap on late payment fines, and regulations for automatically raising the tax, among other changes.

What’s next? The Finance Ministry is fast-tracking the completion of some regulations before submitting the draft amendments to the House for discussion as part of the state’s plan to implement the country’s largest-ever property tax reform package, our source said.

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