One of the main aspects of the new tax is that it will not apply to properties used for residential purposes or those that are rented out long-term. According to the Finance Minister, the tax will not be payable by those who rent out their property for at least ten months a year. This is an effort by the government to encourage long-term rentals and ensure that people who use their properties for their own housing or rent them out long-term are not burdened with additional costs.
A key novelty is a significant increase in tax rates. The current upper limit of the property tax, which was 5 euros per square meter, could double to 10 euros per square meter. This increase will have the greatest impact on owners of vacation homes and second homes, who will face substantially higher tax burdens than before. Those who use their vacation properties only occasionally or rent them out short-term will now have to pay this higher tax.
The government also plans to start collecting property tax in municipalities that have not yet levied it. This means the tax base will expand, and more municipalities will be required to implement this tax. Additionally, it is expected that not only the upper but also the lower tax limit will increase, meaning that even smaller properties will be subject to higher tax burdens.
Minister Primorac also criticized the current low tax burden, especially on short-term rentals in tourist areas, calling it "ridiculous." He believes the current system creates "tax havens" for property owners who take advantage of favorable tax conditions regardless of the actual value and use of their properties. Therefore, according to the minister, the tax increase is necessary to create a fairer and more sustainable economic model that meets the current needs of society.
Furthermore, Primorac specified that the property tax payer will be determined annually in March, based on the current year's status. If the property owner has a long-term rental contract for at least ten months of the year, they will not have to pay this tax. This is an effort by the government to motivate property owners to use their properties efficiently and rent them out long-term, thus supporting the rental housing market.
This new tax system brings significant changes that will affect a wide range of property owners, especially those who own vacation homes or second homes. The government expects these changes to not only increase state budget revenues but also bring greater fairness to the tax system and support long-term property rentals, ultimately contributing to better housing availability for citizens.
