August 24, 2020 – Government proposes all reconstruction costs be borne by the state and city for the poorest homeowners in society.
In new government proposals, poorer residents of Zagreb and the two neighbouring counties most affected by this year’s earthquake will pay nothing towards the cost of home reconstruction. The new proposals contained in the Law on Reconstruction of Zagreb will be officially presented in a government session on Thursday 27 August and then to parliament on September 2 or 3.
Homeowners in the City of Zagreb, Krapina-Zagorje, and Zagreb County whose residencies were damaged are those affected by the new proposals. If a homeowner or cohabiting couple earns HRK 8,000 a month or less and does not have assets of more than HRK 200,000, the state and the city will finance the entirety of their home renovations.
In the law’s first reading, it was proposed that structural renovation costs be borne 60% by the state, 20% by city or regional government, and 20% by property owners and co-owners. Property owners whose income did not exceed HRK 4,000 per month in the previous year (or cohabiting couples earning less than HRK 8,000 per month), will now be exempt from any contributions towards reconstruction, provided they did not hold assets exceeding HRK 200,000 on the day of the earthquake, 22 March 2020. Assets refer to real estate, motor vehicles, and vessels, savings and shares.
For people meeting the criteria, apartment and house renovation costs will be borne 80% by the state, and 20% by city or regional government (City of Zagreb, Krapina-Zagorje, or Zagreb County). Reconstruction costs of the homes belonging to those left disabled of the Homeland War or beneficiaries of social care who receive maintenance assistance will also be fully financed.
Damage to a dwelling on Ilica in central Zagreb © Franjo Tahy
The proposals are aimed at assisting the poorest homeowners affected, although the implications stretch much further
People who do not meet the low income/low asset criteria, who do not have a home insurance policy, must pay for 20% of their home renovation. Those who do have an insurance policy can request payment or partial payment of that 20% by their insurers.
It is possible that some unmarried couples who are living together, but not officially co-habiting, and whose income and assets exceed the set amount, could benefit before other couples who are married and legally co-habiting.
There are also potentially serious implications for those who are on a very low income, but who have inherited a property worth more than HRK 200,000 (approx €26,500).
In the final bill, there remains a provision for mortgaging real estate if the owners and co-owners cannot secure 20% of building renovation costs.
The new proposals also include the possibility of obtaining financial assistance for the repair of staircases in buildings, in addition to previously announced assistance for the repair of gable walls, elevators, chimneys, and the replacement of gas boilers.
Damage from the earthquake in Zagreb and surroundings was estimated at 86.4 billion kuna (approx €11.5 billion). The new proposals mean that a larger amount than this previous estimation will now be needed.
