The new act on local development fees came into force in
Slovakia on November 1 2016. Under the act, a fee will be
charged for certain construction activities that take place in
municipalities and cities. The act is a response to the
extensive development in towns and municipalities that need new
infrastructure but do not have the finances to fund the
building. Investors pay the fee, and local governments should
use the revenue to build technical and social
There is no requirement to charge the fee; it is for the
town and municipal councils to decide whether to implement it.
The fee can range from €10 to €35 ($10.77 to $37.68)
per square metre of above ground floor. Municipalities can set
the rate in a by-law once at the start of each year.
The basis for calculating the fee is the size of the above
ground floor area in square metres, determined by adding up the
area of all the rooms on the above ground levels of the
structure. Calculations are made using the project
documentation annexed to the application for a building
The fee only applies to construction for which a valid
building permit was issued after November 1 2016, but it cannot
be applied before the municipality sets the fee in a by-law.
The fee will apply to construction for which the building
permit becomes effective on or after January 1 2017, provided
that the municipal by-law that sets the fee is effective
beginning January 1 2017.
Municipalities can decide to implement the fee throughout
their entire territory, or only in certain sections. They can
also divide buildings into the categories provided by the act
(such as residential, agricultural production or industrial
buildings) and set different fees for the different
One flaw in the act is its ambiguity as to whether the fee
must be paid for building renovations and restorations.
The act sets out the building categories that are exempt
from the fee. Examples include minor construction; social
infrastructure; healthcare facilities; schools or buildings
that serve schools; buildings used for religious purposes or
for national defence; museums; libraries; galleries; and
In a surprise move, the legislature also exempted single
family homes under 150 square metres from the fee, despite the
fact that these homes are the greatest cause of the need for
new infrastructure. Interestingly, the fee applies to single
family homes over 150 square metres, and not just to the area
exceeding the 150 square metre threshold but to the entire
floor area of the home.
The fee is paid by the applicant to whom a valid building
permit was issued. Municipalities, self-governing regions and
the state are all exempt. The fee is levied by a decision of
the municipality. It is payable within 15 days after the
decision becomes final, regardless of whether construction work
has already started. This becomes a financial burden on the
investor shortly after the building permit is issued.
Therefore, it may be advisable for investors to postpone filing
the application for a building permit until they have all the
finances at hand for construction.
The fee can be paid in one or more instalments based on a
decision of municipality. If there is a change in the size of
the floor area during construction, the municipality will issue
a new decision and levy any additional fee as necessary.
If construction does not begin and the building permit
expires (typically two years after the issue date), the holder
of the building permit must notify the municipality within 60
days of the expiry date and the municipality will refund the
fee. Otherwise, the holder of the building permit forfeits the
right to the refund.
Daniel Futej and Dalimir Jančovič