Prime Minister Ilie Bolojan on Monday evening said that establishing the property tax based on the market value will not automatically generate new tax increases.
"We established to apply, from the end of this year, a percentage rate based on the market value of properties. This market value is currently being determined based on transactions taking place across the country. (...) This will not mean a new increase, because the percentage applied by local authorities can be adjusted by each locality. It is true, however, that the amount to be paid will be close to what is paid this year. Basically, this is a transition year, but we could no longer continue with the existing system. We now have two options. We are currently carrying out an analysis to see what the impact is and where the problems lie, and we must take certain decisions. Property taxes in local administration certainly depend on several factors, which vary widely and cannot be integrated into a simplistic formula, as they depend on the status of the locality - whether it is a municipality or a town - on zoning, on the type of house and on the materials it is built from,' Bolojan told Digi24 private television broadcaster.
The Prime Minister added that, in Europe, local taxes generally cover all the expenses of town halls. In Romania, however, the revenues of local authorities cover only a quarter of staff costs.
Ilie Bolojan also pointed out that over the years 'very many exemptions' have been created in Romania, meaning that 'a significant proportion' of citizens no longer paid local taxes and duties.
'There are certain areas, especially those where people live in buildings over 50 to 100 years old - areas with old houses, historic districts and so on - where the impact was much greater, because a tax increase overlapped with the removal of a tax exemption,' the Prime Minister explained.
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