The government confirmed Thursday proposed adjustments to the value of real estate in the database of the Surveying and Mapping Authority (GURS) which will serve as the basis for calculating the proposed real estate tax. Due to the ongoing real estate slump, property values will be reduced by 10-30%.
The average downward adjustment will be 17%, which Infrastructure and Spatial Planning Minister Samo Omerzel said was a consequence of the general drop in market prices of real estate across Slovenia in the past three years.
The proposal for the adjustments was drawn up by GURS, which is bound by legislation to adjust prices in its database when market prices change by more than 10%.
"This indexation exercise...will mean that people will need to pay less in real estate tax," Omerzel said after the government session in a reference to the tax which the government wants to introduce in 2014.
The adjustment takes place after the debate on the proposed real estate tax saw complaints that the current values in GURS's database do not reflect reality on the ground due to the economic crisis.
GURS will make adjustments to property values based on data from recent real estate deals so as to make the adjustments realistic.
For example, prices for flats in central Ljubljana will be reduced by 16-17%, whereas those of houses in Ljubljana will be cut by up to 24%.
Values will also be reduced by around 15% for flats in cities such as Postojna, Nova Gorica and Idrija, while those in Maribor, Novo mesto, Celje and Kranj will be brought down by 10-12%.
One of the biggest reductions will be for office space and shops in cities, which are to be reduced by up to 25%. Houses in the area around the town of Jesenice (N) will also see a 25% reduction in value.
Omerzel highlighted that the biggest drop in market prices had been registered in shop and office spaces, which is why the adjustment for these types of property will be the highest on average.
The value of building land will also be adjusted, but farmland values will remain unchanged as GURS has not registered a change in prices of 10% or more.
A significant downward adjustment will also be made for commercial buildings, which will see a 20% reduction in prices in Maribor, 15% in areas around Slovenska Bistrica and Ptuj and 10% in Ljubljana, the coastal areas, the region of Gorenjsko and around the city of Celje, among other places.
This is the first indexation of prices in GURS' database since it was launched in 2011 following the mass valuation of real estate.
The Finance Ministry is still finalising its proposal for the real estate tax.
In September it unveiled tweaks to the initial proposal released in June in an attempt to find consensus following extensive criticism from the opposition and various interest groups to the original proposal.
Talks with a number of groups unhappy with the proposal, including farmers and business, are reportedly still ongoing.
Source: SloveniaTimes
