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Slovenia: Massive Concerns Against Real Estate Tax

Published: October 18, 2013; 21:46 · (Vindobona)

The Slovenian government plans to introduce property taxes in order to reduce the budget deficit. The opposition warns that the tax may be “highly counterproductive”.

Slovenia: Massive Concerns Against Real Estate Tax / Picture: © Vindobona.org

Slovenia´s government is looking for new revenues. The property tax may bring more than € 400m. This corresponds to 1.2% of the country´s GDP.

This year, Slovenia´s budget shortfall will reach about 6.0% of GDP, economists say. Without the aggressive austerity cuts and the radical privatization policy, the budget deficit would be even higher. Next year, Slovenia plans a budget deficit of 3.2% of GDP.

However, the effect of the property tax is already scheduled. Slovenia´s Minister of Finance Uros Cufer explained that the tax rate will range between 0.07% and 0.75% of the property value. In November, the Slovenian Parliament will officially approve the government´s proposal.

Not only economists warn of the real estate tax. The Slovenian opposition parties stress that the tax may ruin the Slovenian agriculture. Taxing agricultural land, farms and forests would cause a collapse of the Slovenian agricultural sector, the Slovenian Democrats (SDS) underlined. Robert Horvat (SDS) explained that agricultural land must be used to produce food. “Our land must not be subject of fiscal problems.”

What is more, it is still questionable whether Slovenia´s government will be able to implement the controversial tax reform. The governing pensioner´s party (DeSUS) announced that the real estate tax will not be supported as proposed.