The government’s decision to introduce a surplus value tax on real estate during the current economic recession and financial crisis is proving to be controversial for everyone in the property market; owners, public notaries and lawyers alike.
As of the 1st of January, public notaries must submit a declaration of performance of a 15% withheld tax on the surplus value of the real estate transaction, even if there is no actually surplus value.
While the government decided to reduce the property transaction tax in an effort to rejuvenate the real estate market, the new surplus tax may lead to not only canceling any gains for buyers, but may also lead to higher overall taxes paid. This has troubled public notaries and could discourage perspective buyers.
According to the law, the difference between the acquisition value and sale value is determined by the objective values. Even though market values having dropped well bellow the objective values though, the Ministry of Finances is refusing to reduce them so that it can collect high taxes from the transactions.
Despite the serious problems in the implementation of the controversial surplus value tax, the Ministry of Finances has insisted that a 15% tax on the surplus value from property transactions be collected.
