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New building permit fee

The new act on local development fees introduces another fee for builders.

Municipalities will be able to impose a so-called “development fee” in their territory, in a part of their territory or in individual cadastral areas with a generally binding decree.

The development fee will apply to every surface construction for which a valid building permit is issued. Removal of construction defects or damage, small constructions, extensions and additions to buildings with a floor area of up to 25 m2, family houses with a floor area of up to 150 m2 and certain public buildings are excluded.

The fee will range from EUR 10 to EUR 35 for every m2 of floor area commenced above ground and the specific amount will be determined by the municipality. The fee will apply to every natural or legal person who is granted a building permit. The fee is set on the day of validity of a building permit and is payable within 15 days after being imposed. There will also be a possibility to pay the fee in instalments by agreement with the municipality.

The act will come into force on 01 November 2016. Larger municipalities and cities are expected to introduce the fee in order to increase funds in the municipal budget. Funds can be used mainly to develop the municipality’s infrastructure. For builders, however, this step means another financial and administrative burden which will probably lead to an increase in real estate prices on the market.