Tyrol businesses seek more exemptions from planned land levy

Tyrol’s black-red state government plans to approve a levy on undeveloped building land on September 1, but business representatives are calling for further exemptions, ORF reported. The consultation period for the proposed law has ended, with responses ranging from satisfaction to claims that the measure would be ineffective.

The levy was a condition of the coalition agreement with the Social Democratic Party. It is intended to bring designated plots onto the market for housing construction. Owners who hold building land for many years without developing it and thereby speculate on its value would have to pay.

The law is scheduled to enter into force in 2027 but would not become effective until 2032. Land reserved for a family’s own needs would be exempt, with up to 700 square metres exempt for each eligible person. The proposal includes several other exemptions.

Businesses call for equal treatment

Building plots used for agriculture would also be exempt. The Tyrol Chamber of Commerce says this discriminates against businesses and wants commercially and industrially used plots, including mixed-use areas, to be excluded as well.

“It is very important for us as representatives of businesses that all plots used commercially or industrially, including mixed-use areas, are exempt,” said Anton Rieder, vice-president of the chamber. He said businesses needed room to develop in Tyrol and should be treated equally with agriculture.

The Tyrol Chamber of Lawyers also criticised the proposal. Michael Sallinger, an expert in real estate and constitutional law who prepared its statement, said it was difficult to understand why economically active groups for whom land could provide an important foundation were not being taken into account.

The Tyrol Chamber of Agriculture rejects a building-land levy altogether, arguing that it would make building land more expensive. Its president, Josef Hechenberger, said the exemption for land used for agriculture was essential because farmers operating within built-up areas needed to be able to develop and continue producing food.

Dispute over municipalities’ role

Innsbruck Mayor Johannes Anzengruber, whose city also submitted a statement on the planned law, supports the exemption for agricultural land. He objects, however, to the levy being optional for municipalities.

Anzengruber said clear laws and decisions were needed because optional rules made implementation more difficult for public administrations. The Tyrol Association of Municipalities takes the opposite view. Its president, Karl-Josef Schubert, said municipalities should decide for themselves whether to introduce the levy because demand for building land varied between regions and communities.

The Federation of Austrian Industries criticised the absence of a legal requirement to earmark the revenue, which would flow into municipal budgets. Schubert said this issue could be discussed. Tyrol Chamber of Labour President Erwin Zangerl also supports the levy but considers the numerous exemptions a drawback and said it would be necessary to monitor whether ways were developed to circumvent the rules.

The state government is expected to approve the law on September 1. According to information from the state administration, its substance is unlikely to change significantly.