Text file: 5379.txt
author: vroni13
downvotes: 6
end consideration date: 2014-01-21
id: '5379'
number comments: 36
number views: 3129
proposal type: Competent authority response
response: "Response from the Ministry of Finance\nTaxation of immovable property is\
  \ not new in the Slovenian legal order, as it has been collected so far as a compensation\
  \ for the use of building land, a property tax and, in the last two years, also\
  \ as a tax on immovable property of a higher value. For example, the Law on the\
  \ Construction of Buildings (Official Journal of the Republic of Slovenia, No. 102/04\
  \ - officially consolidated text, 14/05 - corrected, 92/05 - ZJC-B, 93/05 - ZVMS,\
  \ 111/05 - Decree of the US, 126/07, 108/09, 61/10 - ZRud-1, 20/11 - Decree-Law\
  \ No. US and 57/12; hereinafter: ZGO-1) stipulated that compensation for the use\
  \ of building land is payable for built-up and unbuilt-up building land, where built-up\
  \ building land is defined as land on which there are building plots with constructed\
  \ buildings and civil engineering structures other than utility infrastructure structures\
  \ and land on which construction of buildings and civil engineering structures other\
  \ than utility infrastructure structures has commenced on the basis of a final building\
  \ permit. No compensation was payable in respect of land used for the purposes of\
  \ national defence, facilities of foreign States used by foreign diplomatic and\
  \ consular missions or housing their staff, facilities of international and inter-State\
  \ organisations used by such organisations or housing their staff, unless otherwise\
  \ provided for in an international agreement, and buildings used by religious communities\
  \ for their religious activities. The compensation was exempted for a period of\
  \ 5 years, at the citizen's own request, if he purchased a new dwelling as an individual\
  \ part of a building or built, added to or extended a family dwelling house, provided\
  \ that the price of the dwelling or dwelling house or the direct costs of the development\
  \ of the building plot were included in the price of the dwelling or dwelling house.\
  \ The determination of the areas in respect of which compensation was payable, the\
  \ determination of the immovable property in respect of which the compensation was\
  \ levied, the determination of the persons liable for payment of the compensation\
  \ and the amount of the compensation were the exclusive competence of the municipalities,\
  \ and it is a fact that the general exemption for the house or flat in which one\
  \ resides was not provided for in the regulations.\nThe main objectives of the new\
  \ Real Estate Tax Act, as set out by the promoter of the new system of real estate\
  \ taxation, include the following:\n Replacing the existing system of charges linked\
  \ to the holding of immovable property (building land use compensation, property\
  \ tax, forest road maintenance fee and tax on immovable property of higher value)\
  \ with a single immovable property tax, modernising the system by determining the\
  \ value of the immovable property as the tax base, and reducing the administrative\
  \ complexity and opacity of the existing system by determining the subject of taxation,\
  \ the taxable person and the tax base on the basis of data in a single register\
  \ at national level, to increase the revenue from property taxation to around 1%\
  \ of Gross Domestic Product (GDP), which would bring Slovenia, where property taxation\
  \ currently accounts for only around 0.6% of GDP, more in line with OECD countries,\
  \ where on average it contributes around 1.8% of GDP, and to allocate a part of\
  \ the revenue (half) to the state budget as a new systemic resource that will contribute\
  \ to the consolidation of the state budget in the short term, and in the long term\
  \ enable a gradual change in the structure of the tax resources. \n The current\
  \ system of levying taxes on property or immovable property in the Republic of Slovenia\
  \ was outdated, non-uniform, inconsistent, non-transparent and not adapted to the\
  \ new economic situation, which could lead to unequal treatment of the same type\
  \ of property according to its ownership and economic status, or to unequal, if\
  \ not unfair, treatment of taxpayers. The main problems of the current system are\
  \ the different identification of taxable persons, the non-uniform methods of determining\
  \ the tax base, the large number of different, often unrelated, exemptions and reliefs\
  \ and the incompleteness of the real estate registers. The Law on Real Estate Tax\
  \ therefore introduces a new, more modern, more transparent and, above all, fairer\
  \ system of taxation of immovable property, abolishing all previous forms of taxation.\
  \ The objective of the property tax is at least to maintain municipal property tax\
  \ revenues at their current level, while at the same time earmarking part of the\
  \ revenue (half) for the State budget as a new systemic resource that will also\
  \ allow for a gradual change in the structure of tax resources.\nWith regard to\
  \ your proposal, we would like to clarify that the property tax is essentially a\
  \ property tax, linked to the value of immovable property and its ownership. In\
  \ drafting the Law, the Ministry of Finance proceeded from the principle that the\
  \ taxation of immovable property should include all types of immovable property\
  \ in the territory of the Republic of Slovenia as entered in the Register of immovable\
  \ property with the Geodetic Administration of the Republic of Slovenia, regardless\
  \ of their type or ownership, and that the exemption should cover only a selective\
  \ set of internationally comparable exemptions from such taxes, and should set the\
  \ level of the tax liability at a level that allows it to be paid, without forcing\
  \ the taxable person to sell the property in order to pay the tax. In addition,\
  \ immovable property which is not registered in the REN but which fulfils the conditions\
  \ to be registered shall also be made subject to taxation. Such buildings, even\
  \ if they are discovered at a later date, can thus be taxed retroactively, within\
  \ the limitation period, in accordance with the rules governing the tax procedure.\
  \ The new property tax therefore really does cover real estate as comprehensively\
  \ as possible. The level of taxation is set through the tax rates by starting from\
  \ the current level of taxation and proposing a moderate increase. A different tax\
  \ rate is set for so-called 'resident residential property', i.e. property which,\
  \ from the owner's point of view, has an economic function in the way that they\
  \ either occupy it themselves (they have a registered residence at the property\
  \ address and actually live there) or have a rental transaction, either non-profit\
  \ letting or letting on the open market.  Such properties are subject to a lower\
  \ tax rate of 0,15 %, while all other residential properties, which are therefore\
  \ not in an economic function from the point of view of the owner (or co-owners),\
  \ are subject to a tax rate of 0,50 %.\nIn the long term, the property tax is an\
  \ important new systemic tax, which is also intended to start reducing other tax\
  \ burdens, notably the burden on labour, once the crisis is over.\n "
response date: 2014-02-12
response due date: null
sent date: 2013-12-23
title: Property tax
upvotes: 29
url: https://predlagam.vladi.si/predlog/5379
