Ljubljana, 23 December (STA) - The government confirmed on Monday a blueprint for a property tax that is expected to net EUR 600 million per year by taxing homes in which the owners do not live as a means of increasing the supply of rental properties and driving down rent.
The currently proposed tax is 1.45% of the generalised value of the property per year.
If such a second home is rented out, the existing tax on rental income would count towards the new property tax, in some cases cancelling it out completely.
The government sees this as a crucial step to increasing the supply of second-hand homes and consequently reducing rent.
"An owner's first property will not be taxed, others will, with one purpose: to stimulate the utilisation of real estate, not as investments but as housing," Prime Minister Robert Golob said after the government session.
The new tax will not affect the existing local tax known as compensation for the use of building land, which is levied on all buildings, not just residential properties.
According to government plans, this would be a revenue-neutral system as all tax receipts, currently estimated at EUR 600 million, will be leveraged to reduce the taxation of labour and increase take-home pay.
"We are counting on increasing the supply of real estate, both for rent and sale, while at the same time raising household purchasing power, especially of youths," said Golob.
All three coalition parties support the plan - such a tax is mentioned as a goal in the coalition agreement - as a way of making taxation fairer.
Slovenia has one of the lowest property taxes in Europe and international organisations have long urged successive government to start taxing real estate.
Golob said that the country would "follow trends in European countries, which collect more tax from property and reduce the tax burden on wages".
Further details of the plan have not been revealed, but Golob said a broad public debate would now follow, expectedly until the end of January.
Slovenian media have been awash with news about the plan for several days and many authors and commentators have already highlighted potential shortcomings and loopholes.
Economy Minister Matjaž Han, leader of the Social Democrats (SD), said that if any major problems are detected during the period of public consultation, they will be corrected.
