Sofia Municipality Floats 50 Per Cent Rise In Construction Permit Prices

Mayor Boyko Borisov’s administration has tabled a motion to increase state taxes on the issue of construction permits. The plan will be debated by Sofia Municipal Council (SMC) on December 20.

Sofia Municipality's Architecture and City Planning department has submitted a report with the financial committee of SMC, proposing a 50 per cent price hike. Building permit prices rose by 20 per cent in the spring of this year, reaching 14 leva a sq m for the central part of the capital and 5 leva a sq m for the so-called holiday suburban villages in Sofia region.

The increase generated a 25 million leva addition for Sofia Municipality's coffers.

If the new motion is seconded, taxes will rise considerably – from 0.70 leva a sq m at the turn of the year to 21 leva a sq m for the most expensive locations in the city at the close of 2007.

Some observers believe that the sharp rise in taxes for issuing construction permits contravenes Article 7 of the Law for Local Taxes and Fees. This states that tax levels should be determined by material, technical and administrative expenses related to the service. But tax administration officers supported their proposal by citing increased expenses and overheads.

There have also been motions calling for a 20 per cent increase in other administrative services.

For example:
 ** A tax appraisal certificate would cost 14.40 leva
 ** A certificate for paid inheritance tax would come to 9.60 leva.
 ** Other certificates would cost 4.80 leva.

Other sectors' services will also rise in price. The tax on felling pine trees for timber, for instance, would soar from 30 to 60 leva a cu m.