Opposition MPs in the Croatian parliament on Thursday sharply criticised the government's proposal to convert the holiday home tax into a property tax. They said that this would not achieve any of the planned goals and expressed fears that their own homes could also be taxed, which the ruling HDZ rejects.

“We are not prepared to support a housing tax,” said Arsen Bauk (SDP) ahead of the discussion on the proposal to amend six laws as part of the new round of tax reform, which comes into force on 1 January 2025.

He said that none of the goals of the property tax would be achieved, namely to utilise as many unused properties as possible and to enable young people to buy their first property.

“People who have inherited their property will be forced to sell their inheritance”

His opinion was shared by Marija Selak-Raspudic (independent) and Miro Bulj (Most party).

“People are shamelessly assured that the introduction of this tax is something noble and progressive, but it will not solve anything. It will only plug a few holes in the state budget,” said Selak-Raspudic.

“With this property tax, you are putting people who have inherited their property in a position to sell their inheritance because of the OECD, so that Americans, Canadians and English can buy our inheritance,” Bulj said, adding that if elected president, he would call a referendum to abolish the property tax and pass a law on the origin of property.

Dalibor Paus (IDS party) condemned the statement by Tourism Minister Tonci Glavina that the Istrian Democratic Party (IDS), the Primorje-Gorski Kotar Alliance (PGS) and the Kvarner Union are “political promoters of rentierism”.

Croatia needs a thorough reform of public administration and local government

“Glavina has slapped thousands of small landlords in the face by labelling them rentiers,” said Paus, explaining that these are mostly families who use their ancestral properties for tourism in order to earn a decent living. “They are the backbone of the tourism industry,” he said.

Viktorija Knezevic (Centre party) said that Croatia needs a thorough reform of public administration and local government before introducing new taxes. “Up to 250 municipalities could be abolished without any negative impact on the lives of citizens,” she said.

Petar Simic (HDZ party) said he was surprised by the opposition’s criticism of the tax reform and pointed out that it was aimed at lowering the cost of labour and taxing property. He emphasised that it is not the state but the municipalities and cities that will benefit from the property tax and that it is not about people who only own one property having to pay the tax.

Anka Mrak-Taritas (GLAS party) also doubted the positive effects of the introduction of the property tax. “Do you think that the cities and municipalities will levy new taxes before the local elections, which are due in May?” she asked.