Real Estate Tax Act – a fundamental change in land taxation

25. 1. 2021
Real Estate Tax Act – a fundamental change in land taxation

A new subsection has been enshrined in the amendment to the Real Estate Tax Act, based on which land will now be taxed according to the type registered in the Cadastre of Real Estate, regardless of whether such registration corresponds to the actual state. An exception is the situation when the type of land is not registered in the Cadastre of Real Estate. In such a case, the decisive factor is the actual state corresponding to the individual types of land according to the Cadastral Act.

Until now, the tax administrator practice in tax assessment was based on the actual situation. That procedure was also supported by the relevant case-law.

According to the explanatory memorandum, the aim of the new regulation is to remove legal uncertainty for taxpayers and to strengthen the importance of information provided in the Cadastre of Real Estate, because property owners are obliged to notify the authority of changes to their real estate.

For taxpayers, the amendment can mean both an increase and decrease in tax liability, depending on the specific circumstances. However, the new rule only applies to land taxation; the wording of the law concerning the types of buildings has not been modified in any way, which may ultimately bring much greater legal uncertainty than in the original interpretation of the law.

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