Belgrade authorities call for land conversion to be abolished because it ‘hinders investment’

The statement of the Deputy Mayor of Belgrade, Goran Vesić, about the government of Belgrade calling for the abolition of the conversion of the right of use into the right of ownership caused a public outcry.

While Vesić claims that this decision stifled investment, Nikola Jovanović of the Center for Local Self-Government (“Centar za lokalnu samoupravu”) points out that it is a “vague announcement which is potentially extremely detrimental to the budget of the ‘State”.

On the other hand, NALED believes that as a result of such a decision, up to 5,000 hectares of building land has been “blocked” from being used and that the land conversion is actually hurting the budget of the company. state and does not benefit him.

Jovanović points out that the conversion requirement was introduced so that the privatization process does not turn into the plundering of building land and the dismissal of workers.

“This obligation is still in force today when purchasing real estate and other assets through bankruptcy proceedings, when the state retains ownership of the land. Therefore, in these cases, the investor has the option of paying for the conversion of this land into building land which he would subsequently own. It is not reasonable for the state to abolish conversion,” says Jovanović.

NALED believes that conversion harms state and local communities more than it benefits them. According to data compiled by the Ministry of Construction, Transport and Infrastructure, the state has earned only 7 million euros from the collection of conversion fees over the past 10 years, and has lost investments of much greater value because of the conversion. The abolition of the conversion charge (ie the charge to convert the right of use into the right of ownership of the land) is something that NALED has been recommending for some time.

“During our research, we interviewed 13 companies that had to pay a conversion fee of 3.2 million. For this reason, their investments worth 67 million were halted. In addition, according to our estimates, no less than 5,000 hectares of building land have been “locked” for use due to conversion Last year alone, the proceeds of the building land development grant s amounted to more than 16 billion dinars or 135 million euros,” adds NALED.

NALED points out that there are two options: further simplify the procedure concerned by modifying the law, which has not proven its effectiveness, or, on the contrary, abolish the conversion commission. This, they say, would not conflict with the Constitutional Court’s ruling, as it requires the market value of the land to be taken into account when collecting the conversion fee.

(eKapija, 23.05.2022)

This position is also available in: Italian

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