Quick answer: property tax in 2026
- For residential property, only the area exceeding 30 m² is taxable.
- The rate is AZN 0.1–0.4 per m² depending on location; a zone coefficient also applies in Baku.
- Individuals pay in equal instalments by 15 August and 15 November.
Detailed legal overview
Property tax applies to individuals on buildings and vehicles, and to enterprises on fixed assets held on the balance sheet. Two details matter most for individuals: the first 30 square metres of residential space are not taxed, and the rate depends on where the property is located.
Who pays property tax?
Property tax is paid by individuals and enterprises that hold a taxable object. Non-residents carrying out business in Azerbaijan through a permanent establishment pay property tax only on fixed assets connected with that permanent establishment.
Object of taxation
For individuals:
- Buildings or parts of buildings located in Azerbaijan and held in private ownership;
- Motor vehicles owned by resident individuals;
- Water and air transport vehicles.
For enterprises and sole traders: fixed assets on the balance sheet.
Taxable base
| Taxpayer | Base |
|---|---|
| Individual — buildings | Area. For residential space, the part exceeding 30 square metres |
| Individual — water and air transport | Engine volume (cubic centimetres); where there is no engine — market value |
| Enterprise and sole trader | Average annual residual value of fixed assets |
Tax period
For enterprises and sole traders the tax period is the calendar year. For individuals the tax is calculated for the current year.
Property tax rates
For individuals, the rate on buildings is set per square metre and varies by location.
| Location | Per 1 sq.m |
|---|---|
| Baku | 0.4 manat (a coefficient of 0.7–1.5 may apply in Baku) |
| Ganja, Sumgait and Absheron | 0.3 manat |
| Other cities and district centres | 0.2 manat |
| Towns, settlements and villages under district subordination | 0.1 manat |
For other objects
- Water and air transport — 0.02 manat per cubic centimetre of engine volume;
- Water and air transport without an engine — 1 per cent of market value;
- Enterprises and sole traders — 1 per cent of the value of fixed assets.
How is property tax calculated?
For individuals, the formula for buildings is
(Area − 30 sq.m) × rate = annual property tax
The 30 square metre deduction applies to residential space only. Where a property has several owners, the tax is divided in proportion to their shares.
Example 1 — a 90 sq.m apartment in Baku
- Taxable area: 90 − 30 = 60 sq.m
- 60 × 0.4 manat = 24 manats
- With the Baku coefficient applied: 16.80 manats at 0.7, or 36 manats at 1.5
The same apartment can therefore differ by more than a factor of two depending on the zone.
Example 2 — a 100 sq.m apartment in Ganja
- Taxable area: 100 − 30 = 70 sq.m
- 70 × 0.3 manat = 21 manats
Example 3 — a 120 sq.m house in a village
- Taxable area: 120 − 30 = 90 sq.m
- 90 × 0.1 manat = 9 manats
Example 4 — an apartment with two owners
If the 24 manats calculated on the 90 sq.m Baku apartment relate to two owners in equal shares, each pays 12 manats.
Example 5 — water transport with an engine
- Engine volume: 2,500 cubic centimetres
- 2,500 × 0.02 manat = 50 manats
Example 6 — an enterprise
- Average annual residual value of fixed assets: 500,000 manats
- 500,000 × 1% = 5,000 manats per year
- Advance payments are made quarterly at 20% of the previous year's tax amount
Payment procedure and deadlines
| Individuals | Enterprises and sole traders | |
|---|---|---|
| Notification | The municipality sends it electronically by 1 August at the latest | None — the taxpayer calculates the amount |
| Tax return | Not required | By 31 March of the year following the reporting year |
| Annual payment | In equal amounts by 15 August and 15 November | By 31 March |
| Advance payments | — | No later than the 15th of the second month of each quarter |
| Budget | Local (municipal) budget | State budget |
Exemptions and reliefs
Numerous exemptions and reliefs exist for property tax — for example certain state bodies, assets in particular sectors, industrial and technology parks, micro-entrepreneurs and other categories. To identify the relief that applies in a specific case, the type of property and its intended use must be reviewed separately.
Frequently asked questions
Do I pay tax on the first 30 square metres of my apartment?
No. For residential space the taxable base is the part exceeding 30 square metres.
What is the Baku coefficient?
A coefficient in the range of 0.7–1.5 may be applied to the base rate of 0.4 manat in Baku. Two apartments of the same size in Baku can therefore carry different tax.
The apartment has two owners. How is the tax divided?
Where a property has several owners, the tax is divided in proportion to their shares.
Do individuals file a return?
No. The municipality sends the payment notification electronically by 1 August at the latest. The filing obligation applies to enterprises and sole traders.
Which budget receives the payment?
Property tax of individuals goes to the local (municipal) budget; property tax of enterprises and sole traders goes to the state budget.
How is tax calculated on a boat without an engine?
For water and air transport without an engine, the tax is 1 per cent of market value.
How does an enterprise calculate advance payments?
Advance payments are made quarterly at 20 per cent of the previous year's tax amount, no later than the 15th of the second month of each quarter.
Note: the calculations above are simple arithmetic based on the rates stated in this article. The exact amount for a specific property depends on its type, location, the coefficient applied and any available reliefs.
Official sources
This article provides general information and does not replace advice based on the facts of a specific matter. Legislation may change; verify current rules before acting.
