January-based property tax increase, Hoti shows who is expected to be hurt most

According to the LDK deputy, tax burdens will be increased especially for properties of high value.

“Following the new property tax Law, from January 2025 the progressive property tax rate is implemented as follows:

• Property worth up to 100,000 euros ʹ minimum 0.1% rate,
• Property worth 100,000-50 000 euros ʹ minimum rate 0.20%,
• Property worth 500,000-12,000 euros ʹ minimum rate 0.30%,
• Property worth 1,000 thousand-5,000 euros ʹ minimum rate 0.40%,
• Property worth over 5,000 thousand euros ʹ minimum rate of 0.5%.

“As a result, tax burdens will be increased especially for properties of high value. See the following chart: Property worth 1 million euros is charged with 2,400 euros; property worth 5ml euros is charged with 18,400 euros; 10m euros worth of taxes are charged with 43,400 euros. The progressive property tax rate has no economic meaning for several reasons. The first, tax charges on property are progressive from the way the property is worth higher, the higher the tax load. Second, state revenues from property tax do not have only fiscal goals, as they are used mainly for covering the costs of public services related to those properties. Third, the property owner's income used for the purchase of property has been taxed earlier, while the property owner's revenues are generated from property as taxed from the rent. In addition to this anomalies, the new law is taxing cultivated agricultural lands, which under the preliminary law were free to encourage owners to cultivate them or give in exploitation. International experiences do not recommend these standards. As some international organizations have estimated, these changes have been made without any preliminary analysis and consultation with those affected, especially businesses”, writes Hoti in reaction.