Judging by the announcements of some local governments, they will try to compensate for the lack of money in their budgets next year by increasing property taxes, both for individuals and businessmen. Belgrade and Kragujevac have already resorted to this move, while Jagodina, Vlastince and Irig gave up increasing this levy.
However, it seems that these three areas will remain in the minority because there are indications that many cities and municipalities will go the way of Belgrade and Kragujevac. Bor officially announced that, and everyone finds the basis for such steps in the increase of the average price per square meter, which is the criterion for the tax base for 2021. Since the prices of square meters have jumped in almost all cities, it is certain that they will soon resort to this unpopular measure.
The move will probably not be to the liking of the citizens, but local governments, in conditions when their incomes are declining due to the corona pandemic virus, are trying to get money in this way to service the obligations necessary for their functioning.
For the citizens of Belgrade, that increase would average over six percent next year, and that will depend on which of the 14 zones their real estate is located in, because the price of a square meter has been increased differently in each of them.
For example, the estimated price per square meter for the extra zone in 2020 was 195,052 dinars for an apartment, and the next one will be 206,838 or six percent higher. The value of a square meter of an apartment in the first zone for 2020 was 190,091, and for the next one it will be 199,942, which is 5.18 percent more.
What is interesting is that there have been much smaller changes in the valuation of houses by zones, and that there are parts of the city where citizens who own such facilities will pay even lower property taxes.
Kragujevac: A difficult measure, but necessary
However, these are rare cases, and judging by Kragujevac, there are almost no such cases. There, the rate of property tax on natural persons was increased from 0.3 to 0.4 percent. It is estimated that with this move, the city's budget revenues will increase by about 140 million dinars a year.
At the same time, the pockets of the citizens of Kragujevac will be emptied in the amount of 750 to 1900 dinars, depending on the value of the real estate, for an average calculated apartment of 60 square meters and a house of 100 square meters.
The mayor of Kragujevac, Nikola Dasic, said in the local parliament that he is absolutely aware that this is a difficult measure and that it is politically unpopular, but that it is necessary due to the development of the city.
- The state expects us to collect our original revenues, and that is taxes. The fastest growing cities in Serbia have a tax rate of 0.4 percent. That dinar does not go to any councilor, position, opposition or mayor, it goes back to the citizens. Unfortunately, the situation is such that if we want to develop rapidly, build infrastructure, we must do it - said Dasic.
The City Council of Bor found the justification for the proposed increase in the property tax, which the Assembly should verify, at a low rate. They claim that even with the increase, which would be 0.80 percent annually for apartments from the first zone, it will still be the lowest in the region.
- For now, the city of Bor has the lowest taxes in the region. Last year's tax of 360 dinars will now amount to 390. The goal is for the city to generate revenues to the budget not from tax levies of citizens, but from salaries and other sources that finance the city - said the mayor of Bor, Aleksandar Milikić.
The local self-governments of Jagodina, Vlasotince and Irig will also try to find the money to fill the local coffers on the other side and will not increase the property tax rate. Their common explanation is that they are aware that the citizens are also suffering the consequences of the corona pandemic and that they should not be additionally burdened.
Experts, on the other hand, claim that there will be few local governments that will not raise property taxes.
- Usually, the republic compensated the missing funds to the locals from the budget reserves, but now it is clear that due to the corona pandemic, the state coffers are difficult to fill because the economy is in an extremely difficult situation. That is why citizens are burdened with taxes, but many of them will not be able to pay for it due to the situation in their companies - says the author of the publication Macroeconomic Trends in Serbia, Sasa Djogovic.