Slovak municipalities seek higher taxes on office towers

Municipalities in Slovakia are pushing for a reform of property tax laws, arguing that the current system unfairly benefits owners of tall office buildings. They contend that while these structures concentrate thousands of workers and increase demands on transportation, public spaces, and services, the tax revenue generated does not adequately compensate for these burdens.

The core of the issue lies in the surcharge for additional floors in multi-story buildings. The maximum surcharge, equivalent to about 3.3 cents per square meter of built-up area, has remained unchanged since 2004. This stands in stark contrast to the property tax paid by residents for apartments, which is significantly higher at 1.35 euros per square meter annually.

Martin Chren, the mayor of Ružinov and vice-chairman of the Association of Towns and Municipalities of Slovakia (ZMOS), has been a vocal advocate for change. He highlighted the disparity, stating that while property taxes for citizens have increased multiple times in recent years, the surcharge for high-rise buildings has not budged. Chren argues that this situation disproportionately favors tall office buildings, which often pay substantially less tax than industrial enterprises like car factories.

The Ministry of Finance is now preparing an amendment to address these concerns. The proposed changes aim to grant municipalities greater freedom in determining these surcharge rates, allowing them to adjust them more equitably based on local conditions. While the exact wording of the amendment is still pending, both the Union of Towns of Slovakia and the Bratislava city government have welcomed the initiative, seeing it as an opportunity to rectify existing "distortions" in local tax policy.