Croatia Plans 2% Tax on Under-Utilized Property to Boost Budget

Croatia plans to introduce next year a 2 percent tax on property next year to narrow its budget deficit and encourage owners to utilize their assets, according to two government officials who spoke on condition of anonymity.

The proposal, that is expected to be submitted within the next 10 days, would waive 90 percent of the tax for property occupied by the owners, and 80 percent for property that is rented. Factors such as age and location would also be considered.

Croatia, which is set to become the 28th member of the European Union in July, is struggling to revive its economy after three years of recession or stagnation. There are about 200,000 second homes in the nation of 4.2 million, according to GfK Croatia, a market research agency. Most of them are summer homes along the country’s 5,800 kilometer-long Adriatic Sea coast.

To contact the reporter on this story: Jasmina Kuzmanovic in Zagreb at jkuzmanovic@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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