– In this round of tax changes, we will introduce a property tax by transforming the tax on holiday homes – said Primorac, adding that this will achieve one of the tax goals – shifting from taxing labor to taxing property.
The tax would not be paid on properties where people reside and those that are rented long-term. Primorac stated that those who rent properties for at least 10 months a year will not pay this tax, while those engaged in short-term rentals will have to pay it. This means that even those local government units that have not charged property tax so far will have to do so. Also, the existing tax thresholds will be increased.
– The proposal is to increase both the upper and lower limits – said the finance minister, who did not want to disclose specific figures to journalists, stating that he would leave that for a press conference on Monday.
According to unofficial information, the upper limit of the property tax could double from the current five euros per square meter to 10 euros per square meter.
– A person living in the property or who has a property that will be rented long-term will not pay property tax. All others, whether individuals or legal entities, if they have property, will pay tax – said the minister.
He added that the taxpayer will be determined in March for the current year, and those who have a long-term rental agreement and will rent the property long-term for at least ten months in the current year will not have to pay property tax.
– The tax burden on short-term rentals in tourism will increase, which is now paid as a flat rate. These are now ridiculous amounts – said Primorac, adding that in some way tax oases have been created in real estate.
– Such a model of the economy is neither good nor sustainable – added the minister, stating that the proposal will also include an increase in the personal allowance to 600 euros, and other deductions related to the personal allowance will also increase.
Additionally, entry into VAT would be at 50,000 euros instead of the current 40,000 euros, and those who wish to return to Croatia will not have to pay income tax for some time, announced Minister Primorac.
