Technical and legal considerations as the premises for taxation of business real property with real property tax

Abstract

The subject of the article is an analysis of the issues of considering technical aspects for the purpose of real estate taxation. Until the end of 2015, the lack of a legal definition of the concept of “technical considerations” for not using real estate in business activities caused doubts as to its correct interpretation. Despite the appearance of objectivity, in the jurisprudence on real estate tax, technical considerations were interpreted with reference to the underlying causes of poor technical condition within the meaning of construction law. As of 1 January 2016, the concept of technical considerations was replaced with the requirement to issue a decision ordering the demolition of a building structure. The issuance of the decision is an objective premise for the classification of real property as not related to conducting business activity and results in a lower tax rate. Technical considerations are, in turn, an objective condition for issuing a demolotion decision by the construction supervision authority. Replacing the premise of technical considerations with the requirement to obtain a demolition order leads to the actual consideration of technical aspects and the objectification of the criteria for taxing real estate related to business activities.