The liberal opposition Free Democrats will not support the new property tax planned for 2010 in its current form, the party’s executive Gabor Horn said on Thursday.
The liberals are committed to comprehensive tax reform and will support plans to raise taxes on wealth only if paired with tax cuts on labour, Horn said.
According to the latest version, the government plans to levy the new property tax on real estate exceeding 30 million forints (EUR 105,000) in value and possibly on other types of property as well. At the same time, the government has approved plans to cut employer-employee contributions and to reconfigure income tax.
The Free Democrats consider the present drafts unfair and disproportionate, which would not be effective if introduced, Horn said.
He criticised the tax because it would not combine the value of all real estate owned, so if someone owned three pieces of property each below the value threshold, they would pay no tax at all. He added that instead of the current centralised one, the tax should be a local tax.
Finance Ministry spokesman Ferenc Pichler said the government will continue talks with the Free Democrats on the tax. He added that the government expects to collect 40-50 billion forints from the property tax next year.
Parliament will debate the tax bill next week and vote before the summer recess starts at the end of June.