The idea to increase property tax in Slovakia comes not only from the European Commission but is also actively promoted by the Association of Towns and Villages of Slovakia (ZMOS). Brussels considers this tax one of the lowest in the EU and recommends linking it to the real market value of housing. According to the EC, this could make housing more affordable.
At the same time, Slovak municipalities need money for their budgets, which have been affected by inflation and high energy prices. Therefore, they are proposing their own, more specific changes.
What exactly do they propose to change?
The ZMOS proposals, which are already being discussed with the Ministry of Finance, are as follows:
Progressive taxation. Owners of a second and each subsequent property could pay double or even triple the tax. This would primarily affect investment apartments.
Automatic indexing. Tax rates are proposed to be increased annually according to the inflation rate.
The European Commission's idea of taxation based on market value remains a future possibility for now. To implement it in Slovakia, there is a lack of unified property price maps and full functionality of the cadastre after the cyberattack.
Will rent increase and housing become cheaper?
Economists warn that property owners will likely pass the increased tax on to tenants, leading to higher rents.
However, the National Bank of Slovakia has a different opinion. They believe that a higher tax could, on the contrary, improve housing affordability. It would make maintaining empty or investment apartments more expensive, which could encourage owners to sell them and, consequently, lower prices on the market.
What is the government's position?
The Minister of Finance, Ladislav Kamenický (Smer-SD), confirmed that the government is considering increasing the property tax as part of consolidating the state budget. However, one of the coalition partners, the SNS party, opposes it. Therefore, a final decision has not yet been made.
