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Post by crojoe on Nov 21, 2012 12:00:19 GMT 1
And this from yesterdays press.Croatia’s Minister of Finance Slavko Linic has come out and advised anyone with property sitting idle, that they should get rid of it before the new Property Tax Law comes into effect on 1 April 2013. “On property that is not used for any purpose, citizens, business owners, the state and local councils will have to pay the full amount of tax on the value of the property. A message for owners of these properties – Free up the property you do not know what to do with, otherwise it will become an extra burden to you, said Linic, adding that insolvency problems arising from large credit debt occurred because entrepreneurs invested money in real estate, rather than the technology, equipment or human resources. Linic also announced that parliament would debate the new proposed Property Tax Law in the next few months, with all interested parties having a chance to present suggestions. After the debate is over, Croatia will introduce the new tax, which will be based for the first time, on the value of property on 1 April 2013 Read more: visitcroatia.proboards.com/index.cgi?action=display&board=property&thread=9358&page=1#ixzz2CqaqBDiE What does this mean though? Does this just means all will now have to pay council tax on each property? If this is the case then it's not a bad idea really, as if you have a few properties then what is a little extra council tax? Even for any of us lucky foreigners who say own a holiday home on the coast, to pay council tax should not be a big issue. Council tax in Croatia is far below that of say the UK. Or, does this mean that if you built the property illegally you will have to pay full tax? Or, is this mainly for property investors? Those that invested their money into properties to then have them sit idle due to high asking prices, or maybe aimed at money laundering? Then you got to ask how will they collect it if the owner says they don't have the money to pay such a tax? I kind of get what Linic is aiming at, investment in jobs rather then buildings, but it's a bit like building a hospital at the bottom of the cliff then a safety fence at the top... a bit late to fix the problem and now discipline those that dove off.
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Post by aussiecro on Nov 21, 2012 12:48:48 GMT 1
I don't even think they know what the new Property Tax will look like but that is an absurd thing to be saying as the Minister for people to sell up. After reading a few articles, I have a feeling the new tax will be like you say something similar to council tax, but will be in the region of 2% annually of the value of the property.
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Post by crojoe on Nov 21, 2012 13:07:12 GMT 1
I don't even think they know what the new Property Tax will look like but that is an absurd thing to be saying as the Minister for people to sell up. After reading a few articles, I have a feeling the new tax will be like you say something similar to council tax, but will be in the region of 2% annually of the value of the property. 2% annually of the value of the property is pretty steep sounding: On a 100,000 euro property that would be like: 2000 euro Is he talking about empty properties & ruins?
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Post by aussiecro on Nov 21, 2012 13:12:03 GMT 1
That is the figure being banded around..2%..that is why there has been an uproar. I am guessing its on all unsued properties, regardless of what condition it is in.
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Post by indianalindsay on Nov 22, 2012 12:02:52 GMT 1
I don't even think they know what the new Property Tax will look like but that is an absurd thing to be saying as the Minister for people to sell up. After reading a few articles, I have a feeling the new tax will be like you say something similar to council tax, but will be in the region of 2% annually of the value of the property. 2% annually of the value of the property is pretty steep sounding: On a 100,000 euro property that would be like: 2000 euro Is he talking about empty properties & ruins? Isn't that 3 or 4 times the average monthly wage. I know a lot of Croats who are multi-home owners, that will be crippling. I wonder if the illegal builds will get away with this tax.
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Post by crojoe on Nov 22, 2012 12:39:17 GMT 1
2% annually of the value of the property is pretty steep sounding: On a 100,000 euro property that would be like: 2000 euro Is he talking about empty properties & ruins? Isn't that 3 or 4 times the average monthly wage. I know a lot of Croats who are multi-home owners, that will be crippling. I wonder if the illegal builds will get away with this tax. Guess that is why this minister said it will hurt. Ha! I wonder why they are doing all these types of strange taxes, closing companies and so forth that in many ways concern property? The more I hear about it the more I wonder what is up in the back rooms of the government? Land grab or milking the cows? All seems very odd. I guess though it won't affect peoples vacations homes and in theory they are being used throughout the year, must be more about ruins and vacant homes, apartments and so forth, although it also says it's not about businesses owned property, so that rules out all the empty flats, many built with questionable money.
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Post by aussiecro on Nov 23, 2012 14:06:18 GMT 1
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Post by swordfish on Feb 12, 2013 9:06:48 GMT 1
What does this all mean. If you are a foreigner you purchased land or house (Both) through a company which was necessary for ownership and now the government has closed your company through lack of trading. What are your options - open another company? and have this closed in 3 months time and pay more taxes. So every 3 months you have to start a new company up.
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Post by Ribaric on Feb 12, 2013 10:35:13 GMT 1
What does this all mean. If you are a foreigner you purchased land or house (Both) through a company which was necessary for ownership and now the government has closed your company through lack of trading. What are your options - open another company? and have this closed in 3 months time and pay more taxes. So every 3 months you have to start a new company up. Is the same question asked by everyone.
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Post by amatesic on Feb 25, 2013 10:40:56 GMT 1
Oh goodness, the property tax is not going to be so bad for those that are not wealthy. Firstly for exemptions to the level of tax to be paid will only apply to legal homes. First home will have note worthy exemptions to the property tax based on the number of people living in the home. Homes that are rented out will also have good exemptions as long as you pay tax on rental income .... 10% tax. Holiday rentals will also have good exemptions if holiday letting is done legally, payments to tourist board per bed per season which is not high. Holiday homes will also get an exemption. Here comes the bad part ... multiple properties not in function, use, will have no exempltions. Homes that are not legal, without at least a building permit, oversized properties not as per building permit, properties that have not been legalized, or parts of properties if not legalized, will not be able to claim excemptions for that property or unlegalized part of that property. In claiming the exceptions you will have to prove for what size of property you are using exemptions. This has to match the legalised documentation. Croatia is getting its act together in alignment with most countries in the EU. Is it good or bad for foreign investors. Naturally those that believe that properties should not be taxed will think its a bad idea, for those that believe that the country needs to collect taxes to provide services will consider it fair. I hope they reduce the service tax as 25% VAT eventually is bad for business and investors. First row homes to the sea dependant on the area will be in a higher property tax bracket, but then again the best first row homes to the sea in the more popular areas are worth 10 times that of other homes.
We still do not have inheritance tax. Unfortunately they have introduced tax on foreign pensions unless the foreign country already taxes the pension to avoid double taxation. Such is life, those that have much will have to pay more ... most of Europe seems to be socially democratic ... or am I wrong.
I would love for Croatia to become the Florida of Europe and to keep it unspoilt and more exclusive than lets say Spain. Our coastline has the most sunny days in a year in Europe. Still we are a somewhat cold in the winter for my liking and then in most seaside villages not close to bigger cities its too quiet for me.
We still have a very beautiful coastline and I have travelled extensively as an IT and organizational development/management consultant around the world. I believe that most countries have their own beauty. I have enjoyed the natural beauty of a lot of countries. I am Australian (of Croatian heritage) and have spent the last 10 years in Zadar. I love the region, would choose it over any other region, even Istria or Hvar from a home/living perspective.
That's my two cents worth. I have ranted on. Sorry
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Post by amatesic on Feb 25, 2013 10:45:56 GMT 1
I have forgotten to add .... apartment prices direct from builders that have been sitting on their investments for a better time to sell ... have started to sell at more reasonable prices ... due to their inability to return credit or their fear now of this new property tax. Home prices will also come down in price, but still it will be based on location, location, location so first row properties in good locations or those with panoramic views close to the sea will continue to increase in value. Thems the breaks.
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Post by propertymanagement on Mar 1, 2013 12:02:02 GMT 1
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Post by polako on Mar 1, 2013 16:39:40 GMT 1
Thanks for the link pm... great news (if cro gov don't introduce this) ;D
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Post by propertymanagement on Mar 2, 2013 0:50:53 GMT 1
I don't think there will be new takes anytime soon, especially not real estate tax. I was telling this months ago to my clients... there are several reasons why I am sure about this:
- Croatians barely survive, so they can't take any more taxes... the government is aware of that and that's why they gave up on this new real estate tax. - it is necessary to sort out the land registry books before new property tax takes place... because you can't tax a property owner if you don't know who the owner is... and there are still many properties with unsolved ownership. It's not fair to tax people who sorted out the ownership and do nothing about the properties where the ownership is not sorted out...
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Post by amatesic on Mar 2, 2013 8:15:59 GMT 1
The Croatian government does know who most owners are ... they are introducing the tax through systems already in place .... payment for komunalija. Some property owners will slip through the holes in whatever system they put in place at first. Which is why they have also said they will add the taxes as liens on properties whose ownership is not clear, so it will have to be paid one day by whoever buys the property.
There is much computer programming going on in the government to piece together information through the OIB number. Do not underestimate the power of computing systems and programmers today. They do not need to get 100% immediately, they are aiming for a percentage of 90%. That is possible today.
Don't be an emu (stick your head in the mud). Legalize your property, get your rental income legally and you will be able to claim reductions from the full property tax amount.
Its only 3rd world countries today where people do not pay property tax in one form or another. Welcome to the EU!
Seriously, look at Bali, Indonesia where Australian ex-pats are going if you want to have your money go further and still want an English speaking community at hand and its warm throughout the year. I am thinking of investing there as soon as I can myself as I will need my pension one day to go as far as possible.
Do not get me wrong, I love it here, I get by nicely, its just that the Croatian government is so inexperienced and its people so completely influenced by communistic mentality (even the young get cultured through their parents) that it will take a couple of generations to weed out. As organizational gurus point out, it takes 100 years to change a culture. Most Croatians sadly do not realize that they have a communistic/sot mindset. They like the new opportunities of capitalisam when the going is good, but when times are bad they want the protection of som and communism. Unfortunately one cannot have it both ways unless one has high taxes.
I see a brick wall for 3-5 years, lots of restructuring, a painful transition period for most Croatians, the last throes of a people being forced to change for what will in the long term be a more sustainable country and community.
Only after this will most investors dare to invest their hard-earned money. However, there will be some risk taking investors who will way the benefits of getting in now during the recession and take advantage of the situation and those that will want to see that light at the end of the tunnel more clearly before they jump. A lot of big investors have been burned in the last 20 years .... it will take a while for their stories to be forgotten by the major investment community.
Back to the point .... the major taxes that most EU countries have are going to be introduced, like it or lump it.
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