The Ministry of Finances is expected to submit its draft of the upcoming unified real estate tax, which has gone through a great deal of changes over the past year.
According to the draft proposal all real estate property is liable for taxation, from the very first square meter and the first euro in value, regardless of whether they are within city zoning plans or not, or whether they have an electricity supply or not. For the first time ever agricultural land will also be taxed, with farmers also having to pay for any agricultural buildings.
The new draft contains a few changes compared to the previous one, which contained some glaring omissions and injustices. The previous draft allowed taxpayers to cede property to the State in lieu of paying taxes, without to pay back any change in cases where the value of the property exceeds the debts. While the new rectified this problem by allowing taxpayers to cede part of their property to the value of their debts, it has not addressed situations where the property cannot be broken into smaller parts, such as apartments.
It is rumored that the new draft will reduce the transfer tax to 3%, although it has not been clarified when this would come into effect. Market experts believe that real estate transactions will cease entirely until this tax reduction is implemented. The Ministry has not yet revealed if there will be any exemptions, with rumors suggesting that a 50% discount might be available to low-income groups.
How the new real estate tax will be calculated
In the case of apartments, houses, offices, stores, location and age of the building will be taken into consideration. There will be 20 different categories, with tax value starting from 2.3 euros to 14 euros per square meter. For plots of land within city zoning plans there will be 25 different rates, starting from 2 cents to 30 euros per square meter. For agricultural land and all other real estate outside of city planning the rate will commence from 1.5 euros per acre and will increase according to the specifics of each plot of land (such as access to main roads, buildings etc).
