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New Property Tax Could Spell Bad News For Banks In Croatia

Those with unused properties in Croatia are not the only losers after yesterday’s new property tax bill was presented by Finance Minister Slavko Linic. The new tax may also hit commercial banks hard as market values for property drops, says Poslovni Dnevnik.

A 1.5% tax will be imposed on 70% of the appraised value of property that is unused in Croatia, effective from 1 April 2013. Property prices could fall as higher taxes will be levied on second and third homes and many people may try to sell them, effecting banks’ profits as market values drop.

The new tax offers tax reliefs for those living in or renting out their properties, meaning there will be not much difference in the pocket for those citizens.

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