Pensioners living in the centre of Yerevan will have just 500 drams a day to live on as a result of increased property taxes

01.04.2025

Article published on the finport.am website

According to a report produced by the Ayakve project, pensioners living in the centre of Yerevan will now have just 500 drams (£1) to live on a day as a result of gradual increases in property tax. The source, quoting official data, said that 32-33% of Armenia’s population is poor, with the capital also home to poor and elderly people living on their own.

The Ayakve project’s report stated that a citizen receiving a pension of between 35,000 and 45,000 drams will pay 350,000 in property tax in 2026. His or her pension amounts to 500,000 drams for the year. A senior citizen paying 326,000 drams in property tax will have 180,000 left over, which will leave them with just 500 drams per day to live on for the whole year. This means that a pensioner will only have the money to buy one loaf of bread a day.

Armenians started paying increasing levels of property tax from 1 January 2021 as a result of changes in which the rate was calculated. The amount is determined according to the cadastral value, which is similar to the market price. Paying the tax became compulsory for all property holders from the beginning of January 2021, regardless of its value.

Prior to that, owners of real estate worth up to three million drams (over $6,000) were exempt from paying the tax. Whereas previously, plots of land and buildings were assessed separately (buildings were subject to property tax and plots to land tax), now just one single property tax is levied. And to sweeten a bitter pill, the Government announced that implementation of the tax would be spread over a six-year period. In 2021, residents were only charged 25% of the tax, in 2022 – 30%, in 2023 – 35%, in 2024 – 50% and in 2025 – 75%, with the tax having to be paid in full in 2026. As a result, property tax collection capacity has increased on average 4.3 times.

According to the authorities’ own estimates, tax revenues had increased from an initial nine billion to forty billion drams by the fourth year of the new taxation system being introduced. From 2026 when the tax regime will be fully up and running, its annual contribution to the economy is expected to reach 37-38 billion drams.

It has also been reported that the Cadaster Committee will review real estate prices in Armenia at least every two years to determine the amount of tax each property is required to pay.

It should also be noted that, according to Armenia’s National Statistical Committee, poverty levels in the country in 2023 were 23.7% and 24.8% in 2022.

Source: https://finport.am/full_news.php?id=52758&lang=2