Parliament Overrides Veto on Real Estate Tax and Budget


The act was backed by 49 votes in favour and 30 against in the revote after the upper chamber vetoed it in a near unanimous vote last week with the argument that the tax would damage municipalities and was constitutionally contentious.

Finance Minister Uroš Čufer repeated in parliament today that the new tax would be fairer as it would eliminate arbitrariness with which municipalities had determined the amount of property fees so far.

He acknowledged the tax was also prompted by budget needs, but said that it was the least harmful way of increasing budget receipts.

The tax is expected to net roughly EUR 400m a year, an amount that would be split in half between the national budget and municipalities, expect for the first three years in which municipalities will only get the amount equalling what they collected in corresponding fees in 2012.

The coalition and the opposition remained on the opposite banks in today's debate with the opposition arguing that the tax was unfair, detrimental and unsystemic, and would impact on the financial state of municipalities and people's social status.

The real estate tax in other countries is revenue of local communities, while the system as introduced by Slovenia amounts to "looting", and a new nationalisation and weaken rural areas, the opposition argued, expressing the belief that the law would be challenged at the Constitutional Court.

The tax base will be the generalised market value of real estate as calculated in the real estate registry. For residential properties, the base in 2014 will be reduced to 80% and in 2015 to 90% of the generalised market value. The full amount will be paid from then on.

Residential real estate in which the persons liable reside or rent them out for a fee will be taxed at 0.15%, and the remaining at 0.5%. A surcharge of 0.25 percentage points will be imposed on residential units whose value exceeds EUR 0.5m.

Welfare or minimum pension support recipients will be eligible for a 50% break and the disabled in wheelchairs for a 30% break. The act introduces a possibility of lien on real estate in case owner can not pay the tax.

Those unable to pay the tax will be able to ask for the debt to be entered as a lien in the land register, so that it would be settled when the property is sold or changes owner.

Commercial real estate will be taxed at a 0.75% rate, energy facilities at 0.4% and public buildings at 0.5%. Farm outbuildings will be taxed at a 0.3% rate, farmland at 0.15% and forests at 0.07%.

Sacral buildings, monuments, barren land, protected forests and forest reserves will be exempt from tax, as will diplomatic representations, are property of international organisations and EU institutions.

Illegal buildings will be liable to triple the relevant tax rate.

Real estate owners will get notices with a tax assessment by 1 February 2014. The government plans changes to mass evaluation so that specific features of a property could be taken into account and individual appraisal made.