From 1 January 2025, amendments to the Local Taxes Act (currently Official Gazette, no. 115/16 – 114/23), a real estate tax is introduced, which replaces the current tax on holiday homes, with clearly defined conditions for taxation and exemptions.

The subject of taxation according to Art. 2nd paragraph. 1. point 12. of the Local Taxes Act, the subject of taxation are:

Residential real estate, including:

    • Residential buildings.
    • Residential part of residential-commercial buildings.
    • Apartments.
    • Independent functional spaces intended for housing.

They are not subject to taxation

  1. Farm buildings used to accommodate agricultural machinery, tools and accessories.
  2. Real estate with a purpose:
  • Production space.
  • Non-productive business premises, according to the decision on the utility fee.

Tax exemptions

It applies to properties that:

  1. They are used for permanent housing.
  2. They are rented on the basis of a lease agreement for permanent residence – the minimum duration of the lease agreement is 10 months.
  3. They have a public purpose or are intended for institutional accommodation of persons.
  4. They are in the business books of companies as real estate for sale, provided that no more than 6 months have passed since they were entered in the business books (until March 31 of the year for which the tax is determined).
  5. Have been taken over for uncollected receivables, provided that no more than 6 months have elapsed since the takeover.
  6. They have been declared unsuitable for living space due to natural disasters.
  7. They are not suitable for residential use due to other circumstances.
  8. They are owned by local self-government units in their territory.
  9. They are used for permanent residence of the host according to the Hospitality Industry Act  (newspaper).

The tax is paid by domestic and foreign, natural and legal persons who are owners of real estate on March 31 for the year for which the tax is determined.

Tax Amount Range

Instead of the current range of 0.60 to 5.00 €/m2 of usable area, and as prescribed for the tax on holiday homes, the real estate tax will be paid in the range of:

  • €0.6 per m² –  €8 per m²

The LGUs will define the zones for determining taxes.

 

 

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