Facing a wave of criticism from the opposition, the coalition has decided to lower the tax rate for commercial and industrial lands and real estate from 0.75 percent to 0.59 percent. The tax will now bring in EUR 70m less because of the change.

On a legislative level the real estate tax is like a series of never ending episodes. Facing a wave of criticism and amendment proposals from the opposition, the ruling coalition continues to amend the law.

Apart from all the announced changes (a unified tax rate for all residential properties and a deadline extension for final tax assessments) at today's parliamentary session the ruling coalition filed another amendment to lower the tax rates for corporate land and real estate. The National Assembly passed the amendment.

The consequences of the new real estate tax will be the main topic in today's Tarča TV show, at 20h.
At first only residential properties were to get a reduction...
Those that aren't skilled in the mastery of understanding a legislative process could be well confused. The story of the real estate tax has been dragging on for quite some time now and provisions in the law continue to be changed, although to the pleasure of no one. This time we expected the government to only adopt a unified tax rate at 0.15 percent for all residential real estate, and a deadline extension for correcting wrong data and filing in the final tax assessments.

... now corporate real estates also get a tax rate reduction
In the face of growing criticism from the opposition and amendment proposals from the SDS party, which wishes to exempt the corporate sector from the tax, the ruling coalition has decided to lower the tax rate for commercial and industrial real estate – from the present 0.75 percent to 0.59 percent. Land property owned by commercial and industrial entities will also be taxed at a 0.59 percent rate.

"I'm glad that the coalition has finally come to understand that high taxes are a problem in this country, and that we have to make that step forward," explained Marko Pavlišič from the coalition Citizen's List.

SDS proposing a full tax exemption
Members of the SDS opposition party protested that the ruling coalition was trying to divert attention from their proposal. "Why not 0.593333%? If you're already trying to fool someone, then why not do it all the way. You're not only making fools out of Slovenia's citizens, but also out of Slovenia's craftsmen and businessmen," is what the SDS member of parliament, Tomaž Lisec, said about the adopted 0.59 percent tax rate.

The proposal to lower the rate for commercial and industrial real estate received 48 votes in favour. 31 deputies voted against. And what will the reduction mean for the budget? "With the proposed arrangement the tax will collect 32 million euros less," explained Finance Ministry State Secretary Mateja Vraničar.

70 million euros less
With all the amendments together (the abolishment of the higher rate for non-residential apartments and houses, and this year's decision to drop plans on determining a tax rate for building land property) EUR 70m less will flow into the budget. Will there be a need to overhaul the budget? Can we expect public sector cuts? There is growing uncertainty.

The Constitutional Court can cut the knot
It was all maybe unnecessary. This is all happening before Friday, when the Constitutional Court is expected to announce its decision on the compatibility or incompatibility of the real estate tax bill. We expect it to order the legislative body to pass new amendments to the law. In short, at the end we can expect a new real estate bill.