26. 6. 2019
More than five years ago, the Constitutional Court of Slovenia annulled the Real Property Transaction Tax Act (ZDavNepr), the purpose of which was to redefine the valuation of real estate; real estate owners would be taxed as a result. The Constitutional Court further ruled that the ZDavNepr failed to define the models, or the elements, which determine the valuation model.
At the end of December 2017, the National Assembly adopted the Real Property Mass Valuation Act (ZMVN-1), which was supposed to address the shortcomings of the valuation system; in doing so, the valuation system could be used in the taxation of real estate. The goal of ZMVN-1 is to determine real estate values, which would be as accurate as any approximations of real market values; this would be achieved using new valuation models for individual types of real estate. These models had not yet been determined at the time ZMVN-1 passed into law, despite them being a key component in real estate property valuations.
The latest amendment (ZMVN-1A) has moved the deadline for the deployment of the new real estate valuation models and consequently the new cycle of real estate property valuations, from 31 July 2019 to 31 March 2020.
This means that all real estate owners will receive notifications of the new valuations in April 2020 at the earliest, but more realistically at the end of 2020 or in early 2021. In all likelihood, ZDavNepr, which would determine the real estate tax payable, would not pass into law until then.
Author: Matevž Klobučar, Senior associate