Tax Reform proposed by Finance Minister Zdravko Marić suggests reducing the general property transfer tax rate from five to four percent, which will result in a revenue loss of approximately 126 million kuna annually, as well as the abolition of tax reliefs when purchasing the first, used property. The reason for this change is not fiscal in nature, but is explained by the state’s obligation to ensure the same tax treatment for all citizens. This move, which is estimated by the Ministry to generate revenue of 115 million kuna, has been labeled unpopular in some media as it does not encourage “nesting” and birth rates.
– The abolition of tax relief on the first property is a poor pro-natalist measure, believes demographer Stjepan Šterc, who categorizes this move alongside the increase in the prices of bread and milk and VAT on children’s clothing and food.
On the other hand, Novotny believes that the interpretation of introducing a tax on the first property as detrimental to pro-natalist policy is quite simplistic and that it will not have an impact on it.
– Property taxes in our country are unfortunately addressed. We have been avoiding this topic for years. It is necessary to introduce a unified property tax as all European countries have. It would replace all other property taxes, says economic analyst Damir Novotny, commenting that forms of tax, such as the property transfer tax, which do not exist as a standard in the European Union should be abolished.
