The Slovenia Times

Real Estate Tax: New Rates Adopted Under Public Opinion Pressure


The move to introduce a single tax rate for all residential real estate was motivated by popular upheaval, poor records, and the decisions by thousands of property owners to use loopholes, including transferring deeds to spouses and children.

"After the indicative tax assessments were sent out it became clear that the division to occupied and vacant residential properties is causing problems and motivating taxpayers to change legal and ownership relationships," Finance Ministry State Secretary Mateja Vraničar acknowledged to MPs today.

The decision to lower the tax rate on commercial and industrial property, land as well as buildings, was meanwhile taken at the very session today.

It came after MPs spent three hours debating a motion by the opposition to abolish the tax on industrial and commercial property altogether on grounds that this would give struggling businesses some breathing space.

"We could say that Alenka [Bratušek] has provided some botox, but this will not make life easier for businesses," said Branko Grims, deputy for the opposition Democrats (SDS).

While the government initially planned to collect about EUR 400m with the real estate tax, split equally between the national budget and municipalities, the tax receipt is now projected to be about EUR 368m, according to Vraničar.

Despite the surprise move, the Chamber of Trade Crafts and Small Business (OZS), one of the most vocal opponents of the tax, said the tax was still unacceptable.

The OZS insists on a 0.3% rate, which would result in tax bills for businesses similar to what they are currently paying in levies that the real estate tax replaces.

While the amendments to the act, adopted less than three months after the relevant law took effect, appear to address the main causes of opposition, the fate of the tax itself hangs in the balance.

The Constitutional Court will publicly proclaim Friday its ruling on the tax based on seven applications. It may uphold the law, declare individual provisions unconstitutional, or throw out the entire act.

The opposition is convinced at least parts of the law will be overturned. "Let me remind you that this is the law to which the prime minister had tied a confidence vote," Grims noted.


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