Local Leaders Could Decide on Property Tax Without Necessarily Implementing It

The government did not reveal anything new about the property tax at today’s session. Although it was expected that Prime Minister Andrej Plenković would mention this topic in his introductory speech or at least announce when the tax would be presented, this did not happen, reports Index.

The beginning of the parliamentary session has been mentioned as the time for presenting details about the new tax. The parliament begins its session tomorrow, and the government has not yet announced anything.

However, as Net.hr unofficially learns, an amount between 0 to 8 euros per square meter for the property tax is being considered, with decisions to be made by local leaders. They can decide to not implement the tax. This proposal is due to the different conditions of properties on the continent and in the coastal areas.

This means that some local units do not have to introduce the tax at all. The matter is particularly interesting given that local elections are coming next year, and the decision on the amount of the property tax lies with local self-government units. It will be interesting to see how local leaders will position themselves in an election year, as they can choose whether or not to introduce a new tax to their citizens and potential voters.

Plenković reiterated last week that the goal of the property tax is to increase the number of apartments available for affordable rent in the market. Experts are skeptical about whether this will be the case.

– We announced in our election program, and in the government’s, that we would shift the burden from labor taxes to property taxes. Croatia has a property tax; we just call it a tax on holiday homes. What is the problem in Croatian society? The purchase price of apartments is high, and the rental price is also high. To avoid a situation where affordable housing becomes problematic, we must create an environment through measures that the government will undertake that will lead to a reduction in square meter prices and rental prices. How? By having a greater supply since we have about 600,000 empty apartments – said Plenković last week.

– This tax reform is going forward, and it will also go along with further relief of income tax. These are revenues for local units, and the state is not doing this to fill a budget gap but due to this political and economic issue, which is affordable housing – added Plenković, who then stated that he would present the tax no later than this week.