Photo: Pexels - Max RahubovskiyAlthough citizens and companies set aside a record 7.5 billion euros for the purchase of real estate in Serbia last year, as much as a third of that sum was spent on unregistered apartments, houses, and other buildings. The turnover of real estate that is not recorded in the cadastre is a big black point of property-legal relations over real estate in Serbia, but it is not the only one because legal uncertainty is also created by other procedures in this area, reports the portal ekapija.com.
Unresolved ownership issues, illegal construction, and lengthy and expensive administrative procedures are holding back a large number of investments in our country. That is why NALED, with the support of the Swedish International Development Agency (Sida), will in the next three months prepare a comprehensive study with a proposed solution to improve the procedures of registration in the cadastre, legalization, recording of public property, restitution, expropriation, consolidation, conversion, and other procedures.
"There are 4.9 million objects registered in the real estate cadastre, but an almost identical number has not been recorded. Among them are more than 2.7 million properties that meet the requirements to be registered, but their owners have not done so or do not want to, while two million illegal buildings are outside the cadastre records and must first be legalized. The solution for both groups is a simpler and digitized procedure with less documentation and lower costs. Unresolved requests to the cadastre that were submitted on the basis of incomplete documentation, documents that are not enforceable for registration, or outstanding requests for registration of rights to real estate submitted before 2018 are a big burden for further investment in real estate. Bearing in mind the evident lack of personnel capacity in the Republic Geodetic Authority, it is necessary to enable the representatives of interested judicial professions, first of all public notaries but also public executors and lawyers, to contribute and help the cadastre services in resolving backlogs," says Jasmina Radovanović, head of the Unit for assets and investments in NALED.
According to her, the study has an ambitious goal: to offer solutions for the final and successful transition of property relations over real estate in Serbia from social to private ownership. This implies changes to existing laws and the adoption of new laws, as well as the elimination of institutions that complicate the traffic regime because they belong to the past, among which are the right to use real estate, the state, etc.
A team of professors, lawyers, and experts in this field participates in the preparation of the study, and representatives of the economy and departmental institutions—the ministries of construction, finance, and justice; the Republic Geodetic Authotity; the Chamber of Notaries; the Directorate for Property; the Directorate for Agricultural Land—will contribute to the design of quality proposals, etc. The first meeting of this group was held recently, according to the NALED newsletter.
A large segment of the comprehensive study will also be dedicated to redefining the tax policy on real estate. At the meeting, it was assessed that Serbia collects taxes in this area insufficiently efficiently, and that is why it is very advantageous to invest money in real estate, which is why we are known as "a nation that saves in bricks", and often this property becomes "dead capital" because it is not used to create new value. The tax policy is designed disproportionately in relation to the wealth of the taxed person, so the property tax is paid on the right of ownership of real estate and not on the economic strength of the payer due to the fact that this tax does not allow the borrowing costs associated with the acquisition of real estate to be deducted from the base.
The collection of taxes from renting real estate is particularly ineffective. It is estimated that between 150,000 and 200,000 apartments and other buildings are rented, but the collected tax revenues are small, primarily because the rents are paid in cash, which is very difficult for the tax authorities to detect, the bulletin states.
Source: ekapija.com
