First installment of property tax to be paid in August in the future? – Law amendments envisage abolition of payment based on previous-year decisions

Property tax payers are looking at the third installment on August 15, and it remains to be seen how these payments will be made next year.

To clarify, after four years of being in effect, the competent institutions are announcing amendments to the Law on Property Tax. The Ministry of Finance has prepared an operating version, and various associations and institutions have sent 168 suggestions regarding the document. It's hard to tell yet which complaints are to be adopted and which rejected and what the version to be put before the National Assembly will look like.

One of the changes sure to interest citizens who own real estate is that payments made on February 15 and May 15 each year based on decision adopted by municipal tax administration, which are in turn based on prices of real estate per zone, that is, sales prices from the previous year, are to be abolished.

These first two installments are paid based on decision from the previous year. If this type of payment is abolished, tax payers will no longer be obliged to pay taxes until they are provided with the final decision.

Ever since the current law was adopted, there have been complaints by legal persons and entrepreneurs who used to pay taxes on business premises as per book value, not market value, which has considerably increased the amounts to be paid. The differences are drastic. When book value is used, 2.5% is deduced each year for the amortization of the facility. This meant that those who worked in facilities over 40 years old were practically exempt from tax payment.

Nebojsa Atanackovic of the Serbian Association of Employers says that it is not logical for the same amount of tax to be paid for new premises and several-decades-old buildings just because they are in the same zone.

Owners of farms and gardens on the periphery expect the injustice to be addressed as well. When town and municipal authorities change and expand building land zones, repurposing the parcels from agricultural into building land, the tax amounts multiplied accordingly, although the actual purpose hadn't changed, with owners still using the land to grow tomatoes, peppers, corn...

Discussing potential solutions to the problem, Alexander Grunauer of the Swiss Cooperation and Development Office, which is realizing the “Property Tax Reform” project in Serbia, says that “taxation should be done in line with the actual state of things”.

– If we're talking active farms, the tax should be paid on agricultural land – he explains.

Business people say that it would be good to bring back the building land fee, which was a predictable expense, unlike the property tax, into which the fee was integrated four years ago when the law was adopted.

Ministarstvo finansija Republike Srbije

Unija poslodavaca Srbije Beograd

GIZ Beograd

Law on Property Tax

property tax

property tax for legal persons

property tax for entrepreneurs

Nebojsa Atanackovic

Alexander Grunauer

agricultural land

Property Tax Reform project

building land fee

real estate book value

real estate market value