Damascus Suburb Implements New Measures to Raise Revenues from Real Estate
On August 24, 2022, the Jaramana City Council’s executive office issued Decree No. 276, in which it agreed to issue the city’s plan for so-called improvement fees. The council’s technical office had prepared the program to determine the areas and real estate properties that have undergone improvement work per the Financial Law of Administrative Units No. 37 of 2021.
Jaramana is a suburb of Damascus but administratively part of the Rural Damascus governorate. It remained under regime control throughout the war and saw a rapid growth of unlicensed construction and informal housing to accommodate incoming waves of displacement from the surrounding areas.
Per chapter four of Law No. 37/2021, administrative units may impose an improvement fee on individuals who own built or unbuilt real estate (built surfaces and land) if their properties have increased in value due to the implementation of public benefit projects in their given area. Public benefit projects may be implemented by public and private entities and include:
- opening or widening roads, constructing retaining walls, and constructing, widening, or modifying souks, malls, public squares, and parks;
- building bridges, waterways, flood control structures and covering rivers;
- implementing laws related to zoning and urban planning;
- modifying certain facets of the use of the real estate, whether located inside or outside of zoning plans, or within a real estate expansion zone, including amending requirements and restrictions or the relevant building code;
- tourism projects, including seasonal summer and winter projects;
- real estate development zones.
Under Law No. 37, areas that have undergone “improvement” are identified by a plan issued via a decree from the local administrative unit’s executive office. This decree must be published in the Official Gazette. The plan and the decree must also be posted on the administrative unit’s announcements board and in some public areas that have undergone improvement.
Law No. 37 stipulates that a committee – headed by a judge appointed by the Minister of Justice and including two governorate experts and two local experts – is tasked with appraising the improvement made on properties in the concerned area. This appraisal must account for the real estate values before and after implementing the public benefit project. Under the law, the improvement fee is half the difference in the property’s value before and after the improvement.
In July 2021, the Jaramana City Council posted a statement on its Facebook page reporting that the council had warned owners of unlicensed real estate outside the local zoning plans to pay any necessary public utility fees and unlicensed construction fees. Here, “public utility fees” refers to improvement fees. After that, the council issued a letter to the Land Registry office to mark those properties with seizure and restraint on disposal notices.
The council’s reference to unlicensed construction fees is unclear. Indeed, the council said it was not in the process of settling unlicensed building violations that are in the judiciary’s purview, per Decree No. 40 of 2012. It added that no unlicensed construction outside the zoning plan could be legally settled and that payment of an improvement fee does not settle violations.
At the same time, the city council said that owners of unlicensed constructions who pay the improvement fees in total would be granted access to infrastructural and public utilities and services. In addition, the government will lift the restraint on disposal notices on their properties. According to the council, these fees will support the Rural Damascus governorate budget, allowing it to continue service provision.
Here, it is worth noting that owners may sometimes pay improvement fees in advance for services that have not yet been implemented. The Jaramana City Council has said that some services have been implemented in some neighbourhoods while work is still underway in others. In other words, the city council is imposing improvement fees to fund the completion of public benefit works rather than in exchange for already completed works, which is against the law. Meanwhile, the council has not clarified which of the services it provides are considered public improvement works.