The new draft law has entered the public consultation procedure.
Starting in January 2018, Croatia will introduce a construction fee. The provision is included in the draft Law on Communal Economy which Minister of Construction and Physical Planning Lovro Kuščević has submitted to the public consultation. The introduction of the construction fee is one of the biggest novelties in the law because it represents a completely new burden for citizens which has not been mentioned until now, reports Večernji List on April 14, 2017.
According to the law, “the constriction fee is paid for the use of already built utility infrastructure in the local government units.”
As described, the construction fee is actually a new name for the existing utility fee paid by owners of real estate in Croatia. However, the government previously argued that, starting from 1 January 2018, the utility fee will be transformed into the property tax, which has already been decreed by the law on local taxes, which was adopted last year by Parliament. The property tax should on average similar to the utility fee, somewhat more expensive for apartments and houses built after 1988, and cheaper for buildings built earlier.
However, the Ministry of Construction has now prepared a law that will introduce the construction fee also as a replacement for the current utility fee. Minister Kuščević says that the proposal is “an early draft.” According to him, the construction fee would be smaller than the current utility fee and would be paid by those who used the existing infrastructure. The amount of the fee would depend on the level of infrastructure built, so owners of properties is areas with better infrastructure would pay more.
If the law is indeed passed, starting from 1 January 2018, owners of properties in Croatia will pay a contribution for the construction of municipal infrastructure, property taxes and the construction fee for the already built infrastructure, which would in total certainly exceed the current fees paid on the basis on the ownership of real estate, whether it is land, houses or apartments.
“The construction fee is paid by the owner of the land on which the building has been built or is being built,” states the draft text of the law. The amount of the fee would be determined by towns and municipalities according to zones, with the “unit value of the construction fee for the first zone not allowed to be higher than 10 percent of the average cost of construction.” The current reference price for construction per square metre is 6,000 kuna, which means that the construction fee per square metre of a house in the first zone could reach as much as 600 kuna, which would certainly be unacceptable.
Minister Kuščević says that the current law has been changed 20 times and that he wants to introduce a more equitable payment model.
