Zagreb Mayor Tomislav Tomasevic said on Tuesday that the city administration would raise the flat-rate tax on apartment lease to the legal maximum of €200 per bed annually to encourage the long-term lease of flats in Zagreb.

“The main reason is that rent has become too high for the city’s residents. We want to encourage apartment owners to long-term lease and to rent their apartments to the city’s residents rather than tourists,” the mayor told a news conference.

A proposal for increasing the annual flat-rate tax paid by apartment renters from €40 to 200 per bed annually has been put to public consultation.

Tomasevic said that the tax currently paid by people who rent their properties for a longer period of time is ten times higher than the tax paid by property owners who rent their apartments to tourists.

He added that the city administration will fight for affordable housing by building more flats but also by changing the decision on the lease of city-owned flats.

Under the new proposal, the rent for city-owned flats will increase several times for tenants who have above-average salaries. The amount of the rent for those tenants will be raised to one-fourth of their monthly income, to encourage those tenants to move out so that those flats can be rented to people with a less good financial situation.