Property taxes should be determined according to the environment around the building, and not increase equally for everyone, suggests the Deputy Mayor of Sofia for Urban Planning and Development, Arch. Lyubo Georgiev. He made the comment on the discussed ideas for increasing tax rates for housing.
Georgiev said that the rates should take into account the presence of the metro, sewage system, park, school and other infrastructure. In his words, tax policy can thus become a tool with which municipalities can encourage or restrict the construction and sale of properties.
„If we increase them at a loss, this is not a solution“, said Lyubo Georgiev.According to him, higher taxation should be tied to the real conditions that property owners benefit from. He pointed out that the revenues can be directed towards public works in the areas where they are collected.
Proposal for a „Public Works“ fund
Georgiev believes that a „Public Works“ fund should be created. As an argument, he pointed out that the construction of the metro is financed with European funds, while the remaining infrastructure around the new buildings requires sustainable local revenues.
In the public conversation about changes in taxation, higher rates for second, third and subsequent homes are already being discussed. The governing majority is considering a model in which the amount of the tax would depend on the number of properties owned, but specific numbers have not yet been announced.
Empty homes remain outside municipal policy
The deputy mayor said that there are many empty homes in Sofia, a significant part of which are new construction. “Investments happen in properties“, said Georgiev and added that the problem of uninhabited homes is currently not a subject of municipal policy.
So far, no specific rates, criteria for individual regions or a deadline for changing the rules have been presented. Real estate tax is a local tax, with municipal councils determining its amount within the framework of the law.