ZAGREB, Dec 11 (Hina) - Party benches in the Croatian parliament on Wednesday endorsed a government proposal that citizens buying a flat for the first time be allowed to do so without paying a five-percent capital transfer
tax.
ZAGREB, Dec 11 (Hina) - Party benches in the Croatian parliament on
Wednesday endorsed a government proposal that citizens buying a
flat for the first time be allowed to do so without paying a five-
percent capital transfer tax. #L#
However, some benches, such as the Istrian Democratic Alliance
(IDS), warned that the proposal would reduce the already slim
municipal and town budgets.
Forty percent of capital transfer taxes go to the state and 60% to
municipalities and towns. According to some estimates, by
exempting some citizens from capital transfer tax, municipal and
town budgets will lose around 95 million kuna.
The government has made the non-payment of capital transfer tax
conditional on several requirements, including the size of the flat
and the number of family members. For example, a single would be
able to buy a flat with an area of up to 50 square metres without
paying capital transfer tax, a couple would be able to buy a flat
with an area of up to 65 square metres, and a four-member family a
flat with an area of up to 90 square metres.
However, some benches, including the Social Democrats, proposed
that capital transfer tax be paid only for "surplus" square metres.
For example, a family of four buying a flat of 120 square meters
would pay capital transfer tax for only 30 square metres, said Tonci
Zuvela of the SDP.
Jure Radic of the Croatian Democratic Union (HDZ) stated that it was
not the same if a young couple planning to have children or a couple
of pensioners was buying a flat, and suggested that young couples be
given the privilege of buying flats with an area of up to 90 square
metres.
The HDZ also advocates tax privileges for those who build a house on
their own or buy a semi-finished house. Radic proposed defining the
tax-free value of construction land for new houses and suggested
that the amount be set at 300,000 kuna.
Another government condition is that the flat or house that are
bought for the first time cannot be sold for a period of five years,
which the MPs opposed.
This would additionally discourage young couples from having
children, said Vesna Skare Ozbolt of the Democratic Centre, while
the Croatian Peasant Party's (HSS) Ante Markov suggested that
capital transfer tax not be paid if the reason for changing the flat
is a new family member.
The privilege of not paying capital transfer tax would not be
exercised by people who already have a flat or house, or a cottage
house. This privilege would also not apply to people who are buying
new flats, since the purchase of new flats is regulated by the Value
Added Tax and not capital transfer tax system.
The proposal will be voted on in the continuation of the session.
(hina) rml