More and more municipalities are no longer able to finance themselves, so I propose a change in funding. My proposal is based on self-government and self-sufficiency of the municipalities, that is, that the municipalities themselves provide the full funding, while at the same time tackling the problem of increasingly unaffordable housing at affordable prices.

The funding that municipalities would receive would be roughly divided into two groups. The first group consists of the funds that municipalities themselves determine and retain. These are the resources described in Article 7 of the Law on the Financing of Municipalities, which are referred to as "other own resources".

The second group includes revenue from:

- a property turnover tax of 2% of the value of the property;

- a tax on the ownership of the 1st property of 2% of the value of the property above €500,000 and 3% of the value above €1,000,000;

- a tax on the value of 2nd, 3rd, etc. properties of 2%;

- tax on the value of land.

 
Properties that would be exempt from tax under the 2nd and 3rd bullet points:

- Commercial and industrial buildings.

 
Properties which would be exempt under 1, 2, 3 and 4:

- cultural monuments for public and general use,

- buildings for public use,

- barren land,

- buffer forests,

- forest reserves.

 
 Persons who would be exempt from the tax:

- Humanitarian organisations,

- diplomatic missions,

- international organisations,

- EU institutions.

These funds would be collected by the municipalities themselves, and the money collected would flow into a common fund managed by the municipalities themselves. The funds would then be allocated to the municipalities according to the number of inhabitants of the municipality, the ratio of the length of local roads and public paths per inhabitant of the municipality or country, the area of the municipality per inhabitant of the municipality or country, the ratio of the proportion of inhabitants of the municipality under the age of 15 or over the age of 65 to the national average of these proportions. This takes account of the differences between municipalities in terms of population and area, which have an impact on the different levels of resources needed to finance the tasks of the municipalities laid down in the sectoral laws, but does not specify the purposes for which the resources are to be used, since it is the municipality's responsibility to determine the purposes for which the resources are to be used.

 
Taxes that municipalities would no longer collect themselves include:

- Watercraft tax;

- inheritance and gift taxes;

- tax on winnings from conventional gambling; and

- any other tax, if so provided by the law governing the tax.

The above taxes are levied on the income and wealth of the citizens of the Republic of Slovenia, and the funds from these sources would therefore flow into the State budget, as all similar taxes on income currently do.

As the new taxes would put additional burdens on the working population and increase costs for businesses, I propose a proportionate reduction in personal income tax and corporate income tax in the amount of the funds raised from the above-mentioned second group of funding sources. Land value tax would also be an additional burden on the socially disadvantaged, and a minimum cost would be calculated each year. All citizens in employment, actively seeking work or declared unfit for work, and whose income would not exceed the value of the minimum wage plus the newly calculated costs, would be proportionally exempted from the land tax. An example is given below for further explanation:

For the examples below, the municipalities calculate a minimum monthly cost of €20 per month.

Example 1: Net monthly income per person €667 per month or less.

Since the person does not have a monthly income of €687 per month, he/she is exempt from the €20 per month land tax.

Example 2: Net monthly income per person €687 or more.

The above person is not exempt from land tax.

Example 3 Monthly net income per person € 677.

The above person is exempt from land tax at a rate of €10 per month.

So, in summary, the proposal puts more emphasis on taxing consumption - consumption of land and luxury housing, but relieves income tax and corporate income. It encourages immigration to the less developed periphery of Slovenia and taxes citizens more fairly.

The Republic of Slovenia currently has more than 6 000 000 properties and a population of just over 2 000 000 inhabitants, the number of which has not increased significantly in recent years, yet property prices are constantly rising, far outstripping inflation. It is therefore clear that the housing crisis will not be solved by building new housing, as there is already more than enough of it. A new financing structure would therefore allow for more favourable house prices for first home buyers, with more emphasis on land and property values. It would promote efficient use of land and development in less developed parts of the Republic of Slovenia and raise funds in a fairer way.

As the sudden implementation of the proposal would mean a major change from the point of view of both municipalities and citizens, I propose that the change be introduced gradually, with an appropriate transition period of 4 years.