Contentious issues regarding the betterment levy

Abstract

The adjacent fee constitutes a fee determined in relation to the increase of the value of real property due to various events, such as construction of technical infrastructure equipment, division and merging of real property. It is paid by the owners or perpetual usufructuaries. In case of the adjacent fee, two layers of problems can be clearly distinguished: a theoretical and a practical layer. The theoretical layer refers to the legal nature of this liability. Authors treat the said fee in various way, by defining it as a public levy, a tax, a surcharge, or non-tax budget dues. In case of tax, there are additional references to capital gains tax or wealth tax. The practical layer of the adjacent fee is related to the case law of administrative courts. Courts may choose between two lines of judgment which are connected with the seller of the real property after construction of technical infrastructure equipment. In the case of the first line of judgment, the said fee must be paid by the seller. According to the second line of judgment, the purchaser of the real property must cover the fee since it is not related to a person but to an object and it is transferred from the seller to the purchaser along with the ownership right to the real property. In the case of the adjacent fee, another issue is connected with the fact that it is obligatorily charged by municipal authorities. Some lawyers question the obligatory nature of the said fee by assuming that according to the linguistic interpretation of regulations it is optional and can be imposed after specific conditions are met. Another important aspect of the adjacent fee are the costs that should be justified and commensurate with the benefits achieved as the seller or the purchaser. The next problem concerns the absolute execution of the adjacent fee that does not take into consideration the financial capabilities of the frontager. The above-mentioned issues shall be discussed in the article in a comprehensive and critical manner, along with proposed changes in regulations of law.