Property transfer tax payment as condition to title registration in cadasre (again) declared unconstitutional

The Constitutional Court of the Republic of Serbia declared on 19 April 2012 that Article 38a of the Property Tax Law (Zakon o porezima na imovinu, “Sl. glasnik RS”, no. 26/2001, with amendments and supplements) is unconstitutional. The said Article stipulates that the registration of rights in land books, cadastre and other public records of real property cannot be performed without evidence that the property transfer tax has been paid. The decision of the Constitutional Court has not yet come into force, awaiting publication in the Official Gazette.

The Constitutional Court’s decision actually repeats the position of the Federal Constitutional Court of the former Yugoslavia assumed in 2002 (when Serbia was a federal unit of Yugoslavia), when the identical provision of the Property Tax Law was quashed as unconstitutional only to be re-enacted by the parliament a couple of years later. Given the actual budget deficit, one may expect that the Serbian Government would be tempted to propose to the Parliament to defy the Constituional Court once again.

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