New real estate tax act in Slovenia raises questions

Written by on January 2, 2014 in Europe - No comments

The new year brought a new real estate tax act in Slovenia, meant to boost budget revenue by about 400 million euro a year, in effect doubling the amount currently collected by the four levies that it is set to replace.

The proceeds will be split in half between the municipalities and the national budget, with the exeption of the first three years, during which municipalities will get an amount equal to the one they collected in corresponding fees in 2012.

The tax will be collected based on the generalised market value of real estate, as calculated in the real estate registry.

This new tax act, however, faces several constitutional court challenges. The most important ones are that the property values are inconsistent and that the tax is unfair in that it is disproportional to the individuals’ economic standing.

More criticism focuses on other shortcomings, like the fact that many buildings that belong to the state and municipalities will be taxed too, resulting in money being transferred from one state pocket to the other.

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(Photo: maistora/flickr.com)

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