Tax Committee Explains Transition to Determining Real Estate Tax Base by Market Value

Tashkent, Uzbekistan (UzDaily.com) — On 17 December, Deputy Chairman of the Tax Committee, Jahongir Abdiev, explained during an open dialogue with entrepreneurs that a new practice for calculating the tax base has been introduced due to instances of underreporting property sale prices.

According to Presidential Decree UP-246, starting from 1 January 2026, the tax base for real estate objects and construction materials will be determined based on market value, taking into account the location of the property.

Mansur Niyazmukhammedov, Chairman of the Developers’ Association, noted that housing prices within the same district can vary widely—from US$800 to US$2,000 per square meter—and asked how the tax base would be calculated in such cases.

Deputy Chairman Abdiev explained that the mechanism will rely on minimum average prices depending on the housing segment. He emphasized that the new procedure will not affect properties sold at US$800 or US$2,000 per square meter. A capped average price will be established, above which no claims from tax authorities will be made.

Davron Vakhabov, Chairman of the Chamber of Commerce and Industry, suggested setting minimum housing prices based on construction costs, excluding land value: 4.6 million soums per square meter for concrete buildings and 5.6 million soums for brick buildings.

Minister of Construction and Housing and Communal Services Sherzod Khidoyatov added that once the escrow system is launched, each project will undergo full examination, and the tax base will be calculated as the difference between margin and cost. “No one will be able to evade this,” he emphasized.

The shadow economy in the construction sector reaches 41% (97 trillion soums). Underpaid taxes amount to 1.2 trillion soums, and detected embezzlement totals 203 billion soums. In 2024, more than half of industry workers—322,000 people—were employed informally, compared to 294,000 officially employed.

Last year, in 17% of transactions, the cost per square meter exceeded 8 million soums, while in 83% it remained lower: in 39% of cases up to 5 million, and in 44% from 5 to 8 million soums. Over 126,000 square meters of housing (about 10,000 apartments) were documented at 1.2 million soums per square meter.

Tax underpayment due to underreporting of work volumes on 914 construction sites reached 243 billion soums, and the untimely registration of 1,500 properties deprived the budget of another 200 billion soums. In 6,300 limited liability companies, there is no more than one employee, and on 32,400 properties, tax evasion was detected when construction materials worth 5.7 trillion soums were recorded as contributions to authorized capital.