Real property tax: a new bill following another round of public consultations

The Ministry of Finance has published a new bill amending the real property tax legislation following another round of public consultations. The initial bill version was presented in June; the bill incorporating the feedback from taxpayers was presented in September. The third version of the bill was published at the beginning of October, after the second round of consultations.

Changes ahead

In the first stage of the consultations, the Ministry of Finance took into account quite a large number of taxpayers' comments, and, as a result, the second version of the bill, e.g. removed the “technical and functional whole" concept, gave priority to the cla​ssification of a structure as a building, took account of the “erected as a result of construction work" criterion, and foresaw a possibility to extend the deadline for filing the real property tax return for 2025 after fulfilling certain conditions.

The Ministry of Finance declared that it wanted to maintain the status quo of real property taxation so that neither enterprises nor local authorities lose out on the changes.

As local governments very actively participated in the second round of consultations, the third version of the bill is more Treasury-friendly.

Bill 3.0 – the latest changes

Consequently, the latest version of the bill e.g.:

• mentions that particular categories of non-building structures may form part of a facility not listed in the statute (which raises serious doubts and leaves plenty of leeway for interpretation);
• includes a non-exhaustive list of sports facilities taxable as non-building structures;
• imposes taxation of e.g. tent covers and pneumatic halls affixed to the ground;
• removes the restriction that only the building part of a free-standing industrial installation permanently affixed to the ground is subject to taxation.
  

Bill 3.0 is not an easy read and it is to be expected that real property tax will still remain a bone of contention between taxpayers and revenue authorities in many cases.

According to the judgment of the Constitutional Court, the new law should come into force on 1 January 2025. There is little time left for changes. It can be supposed that the third version of the bill will be the one to be proceeded in Parliament.

The new bill is going to revolutionise the real property tax legislation. This is why it is so important to prepare in advance for the challenges ahead. Adequate implementation of the new rules will reduce the tax risk and the likelihood of disputes with the authorities, which may bring you significant tax savings.

We invite you to take a look at our offer and let us check your tax affairs.

If you have questions about real property tax, please contact our experts.