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Constitutional Court ousts Builders Association, 3% of buildings to be built will pass to state for social housing
Written by Esmeralda HIDA 30 Prill 2021
The Constitutional Court has decided to reject the request of the Builders Association for the 3% tax on social housing. In October 2020, the Municipal Council of Tirana approved the decision "On the contribution of the private sector in creating a fund of social housing that passes into the ownership of the Municipality of Tirana from new construction", which provides that every builder who develops a property in Tirana must give 3% of the built-up area to the municipality and the latter will use them for social housing. But the builders did not welcome the decision, saying it was a plus for them. Therefore, a few weeks ago they sent the case to the Constitutional Court, seeking annulment of the municipality's decision. The Constitutional Court has held three plenary sessions on this issue, while two days ago it decided to reject the request made by the builders. The decision published by the court states that the request made by the Builders Association has no legitimate basis and from the in-depth examination of the case it was decided that the request be rejected and the article requesting the provision of social housing 3% of the facilities to be built remains in power. The Constitutional Court of the Republic of Albania considered in the public plenary session held on 28.04.2021 the request from the Builders Association of Albania, which requested that 22/2018 "On social housing". At the end of the review, the Constitutional Court found a lack of legitimacy in terms of representation of the applicant in the Constitutional Court and therefore, decided: Rejection of the request submitted by the Builders Association in Tirana. The final decision will be declared reasoned within the legal deadlines provided by law no. 8577, dated 10.
Warning of builders
While the Constitutional Court was in the process of considering the request of the builders, they came out with a strong warning. Through a public statement, the Builders Association stated that the application of the social housing tax will force them to increase the selling price of the apartments. According to them, this decision was adopted without consulting them and its implementation in the coming months will cause additional costs for citizens. "The business community is concerned about a law passed some time ago on the tax burden that has burdened the construction sector. Unilaterally and arbitrarily, Parliament has passed the law on Social Housing, which obliges 3 percent of the construction area to be transferred to municipalities for homeless families. The business community considers this law as an unreasonable tax and demands its revision. This law will increase the costs per square meter of each new facility, as it will weigh on the final price paid by the consumer. "As a first step, the business community demands that this additional obligation be evidenced as a separate item in the final sale-purchase contract, in order to demonstrate that this is a policy obligation and not a cost to the builder." statement. They say that, a middle choice is for this tax to be distributed to the landowner and other entities involved and who are taxpayers. "Solidarity for the needy and vulnerable should be supported by all taxpayers in Albania and not just by a certain segment of the economy, such as the construction sector,