The Constitutional Court (CC) ruled on Wednesday that the regulation governing the statutory land-use fee and the method of valuing land under statutory use — specifically the rule limiting the fee to 4% of the cadastral value — is incompatible with the Constitution, the court announced.
The case combined three similar applications. The applicants — 21 private individuals who own land on which buildings belonging to other persons are located — challenged the constitutionality of provisions in three different legal acts that set the statutory land-use fee and its calculation principles.
The applicants contested the norms establishing that the statutory land-use fee amounts to 4% of the cadastral value of the land in use per year, as well as provisions limiting fee increases for owners of residential buildings for the period from 1 January 2025 to 31 December 2028.
The Constitutional Court found that a fair balance still has not been achieved between the rights of every landowner to receive a land-use fee that serves as compensation, and the protection of the rights of building owners. A legal framework that places one party in a legal relationship in an evidently worse position than the other cannot ensure social peace and the protection of public welfare, the Court stated.
The Court acknowledged that the legislator has taken steps to address the shortcomings
identified in the Court’s 2 May 2023 judgment, including updating cadastral values. Two cadastral values have now been introduced — a “universal” and a “fiscal” cadastral value.
The universal cadastral value is updated and reflects the market situation; it is not applied to taxes or other public payments. The fiscal cadastral value, which has not been updated, is used for calculating taxes and fees. The universal value may increase, decrease, or remain unchanged in comparison with the fiscal value.
The Court observed that for some landowners — including several of the applicants — the statutory land-use fee will decrease because their universal cadastral value is lower than the fiscal one. From 1 January 2025, these individuals will receive less compensation after paying property tax than before. This situation is further influenced by the application of standard land area and correction coefficients in calculating the universal cadastral value for land beneath multi-apartment buildings.
If the statutory land-use fee does not cover the property tax on the specific land, or is equal to it, or if after paying the tax the remaining compensation is disproportionately low, then such a fee cannot be considered compensation within the meaning of the law. Therefore, in part of the cases a fair balance still has not been achieved between landowners’ rights to compensation and building owners’ rights. Such regulation also fails to ensure social peace and public welfare.
The Court also concluded that even for landowners whose universal cadastral value has increased,
the statutory fee is often reduced by the 30% cap on annual fee increases for owners of residential buildings.
By adopting this norm, the legislator did not in all cases properly balance the rights of residential building owners and landowners.
The legislator assumed that all owners of residential buildings are socially less protected than landowners. The Constitutional Court rejected this general assumption as unfounded, noting that the norm also applies to legal persons, who cannot be considered a socially vulnerable group. Difficulties faced by certain residential building owners in paying the statutory fee can be addressed through other targeted mechanisms, the Court added.
To give the legislator time to establish a framework ensuring that all landowners receive compensation fulfilling its intended function — while also respecting the rights of building owners — the Court ruled that the contested norms regarding statutory land-use relations will become invalid as of 1 January 2027.
The Court also required the legislator, by 1 June 2026, to adopt a regulation ensuring landowners’ rights to adequate compensation in cases where the statutory fee does not cover the property tax for the land, equals it, or leaves a disproportionately small amount after the tax is paid.
Adequate compensation must be provided for unjustified infringements of landowners’ fundamental rights
for the period from 1 January 2025 until the new regulation enters into force. Otherwise, landowners will have the right to claim compensation from the state through court proceedings.
The Constitutional Court’s judgment is final, not subject to appeal, and entered into force upon its pronouncement.
As previously reported, in 2023 the Court found the overall framework for resolving forced divided property arrangements to be constitutional, but ruled the capped rent amount unconstitutional.
The contested norms had set the land-use fee at 4% of the cadastral value, with 2.5% constituting compensation to the landowner. The Court ruled this unconstitutional because the legislator did not justify that landowners’ expenses — which reduce income from the leased land — had been considered.
After years of debate on how to resolve the forced divided property problem — where the land belongs to one owner and the buildings to another — the statutory compensation mechanism entered into force on 1 January 2022, setting the land-use fee at 4% of the cadastral value. If 4% amounted to less than €50, the annual fee was set at €50. The minimum fee is not multiplied by the number of co-owners.
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