New Property Tax in 2013

[Madgolfer]

From the Croatian Times

Croatia's Ministry of Finance has established a working group to draft a new property tax law, which will go up for public debate before the summer, reported daily newspaper Vecernji list.

Finance Minister Slavko Linic remains of the opinion that the law will be accepted by Parliament this autunm, and will come into force at the beginning of 2013. Property tax will replace the current utility fee, which is the main income of local government.

However, the state will dig their hands deeper into the pockets of citizens who own more valuable properties, multiple properties, land, and the like. The amount of the tax will be based on the value of the property, and depending on whether the property is used for residential, vacation, business, rental or is unused.

According to recent public messages from the government, those who live in the properties they own will not face the extra hit with the tax, but the government will be hard on speculators who own apartments which they do not live in or land which is not used.

OK this has been talked about for a quite a while but it looks like it is finally here. How many foreign property owners is this going to hit I wonder? Quite a few I can think of. We shall have to wait and see what % rate they come up with. Something outrageous no doubt.

[Valleycat]

Who is going to decide the value of the property?

Don't even think that you will be able to sell your property for that amount. LOL. NOT!!!

What is the current utility fee?

So, if you have land in your family, passed down from generations gone by, land that use to be farm land, now you are going to be taxed for it. OMG. So I guess we will be buying a cow or getting goats?

What happens if husband and wife own a house and the husband has inherited land and so did the wife inherit land from her family? People are having a hard enough time surviving now as it is.

This is truly going to be a mess.

[Kaskader]

Will be below 1%, but there is no option to vote for it on poll

[Madgolfer]

WOW. Below 1% now that would be something.

[Madgolfer]

The Finance Minister, Slavko Linic, is in consultations with the IMF and the World Bank to help him in preparing and introducing the property tax.

The expert group formed by the Minister has not yet prepared a draft bill on the property tax. The biggest problem in the process are unregulated cadastre books. At least half of the property is not yet enlisted in the cadastre registry, Vecernji list daily reported.

Experts say that the property tax is one of the most complicated tax bills, because it requires good preparation, a capable tax register and service, a well-structured cadastre, and excellent administration. Countries that had introduced such a tax earlier, had been preparing it for years, Vecernji List added.

‘One gets the impression that the Minister wants the tax introduced, regardless of the number of open issues to be dealt with later’, Vecernji List concluded.
Nothing like pushing anew law through regardless of whether its ready or not.

IMF and world bank? WHY? I can understand him talking to other countries that have implemented such taxes but why consult these banks?

[crojoe]

Jul 2, 2012 17:59:32 GMT 1 Madgolfer said:

The Finance Minister, Slavko Linic, is in consultations with the IMF and the World Bank to help him in preparing and introducing the property tax.

The expert group formed by the Minister has not yet prepared a draft bill on the property tax. The biggest problem in the process are unregulated cadastre books. At least half of the property is not yet enlisted in the cadastre registry, Vecernji list daily reported.

Experts say that the property tax is one of the most complicated tax bills, because it requires good preparation, a capable tax register and service, a well-structured cadastre, and excellent administration. Countries that had introduced such a tax earlier, had been preparing it for years, Vecernji List added.

‘One gets the impression that the Minister wants the tax introduced, regardless of the number of open issues to be dealt with later’, Vecernji List concluded.
Nothing like pushing anew law through regardless of whether its ready or not.

IMF and world bank? WHY? I can understand him talking to other countries that have implemented such taxes but why consult these banks?

How often do they do these types of laws and find them to have a negative effect? Like the "no family rule" for spets to work in Croatia. Almost dried up investment and for sure small foreign businesses.

Even now they are trying to close dormant companies and can't make the deadline (past already), so have been given another deadline of 3 months.

Trying to get people to legalize their properties with more deadlines and it's confusion.

Everything is in rush mode now for joining the EU next year, as for years they have just avoided the truth about the system, it's weaknesses and failures. Not to mention incompetence by management who don't know what they are doing and where deep into a mode of corruption.

Maybe Croat politicians should learn the simple quotation that a wise man learns from his mistakes but a wiser man from the mistakes of others.

[indianalindsay]

I am trying to follow how this tax would work and who its aimed at. Is lt like the stamp duty in the UK?

[Carol]

stamp duty is a one-off payment at the time of purchase of a property. The Croatian equivalent is called RETT (Real Estate Transfer Tax).

This property tax seems to be an annual tax to be levied on second homes. I think it is justified under the general heading "Make the FOREIGNERS PAY".

[indianalindsay]

Yet another reason not to invest in Croatia.

Foot, shoot, yourself, in - rearrange these words.

[Madgolfer]

It seems that it will also include inherited (unused) property and land not in cultivation. The exact details are still very unclear.

How they think they will implement and enforce this is beyond me?

[Madgolfer]

Extracted from larger article;

The Finance Minister also announced that, from next year on, the property tax would be introduced, Jutarnji List reported. The unused and new property will be taxed at higher rates, while the property in regular use, such as rented apartments or weekend houses, will be taxed at relatively low rates.

A single person or a family whose property is worth over 332,600 kuna (45,000 euros) will no longer be eligible for welfare aid from the state. The value of the property eligible for the property tax for a single person does not include the basic 35 square meters, and ten square meters for each additional family member.


We await the actual rates......

[ray51]

Watch this space and my warning/s :
once in the EU-concentration camp , all the usual taxation pending , it will be v. v. much worse to live in HR , than in many organised northern countries , e.g. Sweden , Switzerland , Norway , Germany , BeNeLux , Finland and what else have we on this old Continent !
AND I can buy an almost new 2 bed , 2 mod. bath 140 sq.m. townohouse in Mijas , Andalucia for 130K Euros !
Just ask me : Why , oh why , would anyone want HR any longer ?
Carcinoma on the beaches , overpriced fish in restos ( when there's any ) , expensive toll-roads , Ukrainian hookers , rude & Client-service-ignoramus locals ....they can keep it , free & independent , according to late "dr". Tudjman .

[Madgolfer]

Ukrainian hookers

I bow to your superior knowledge Ray. ;D

[Madgolfer]

I see on the TV news that France are now looking into creating a separate property tax for foreign owners.

[crojoe]

Jul 8, 2012 12:24:08 GMT 1 Madgolfer said:

Ukrainian hookers

I bow to your superior knowledge Ray. ;D

Do pray tell us where they are.... my wife's away on a trip. Haha!