"If we want to be in the EU, we can't talk about local rates. They could exist in socialism because one didn't pay contribution based on wealth but based on where someone lived and on floor area," Linic was quoted as saying.

"As of next year, we will replace local rates with property taxes. The message is clear: The problem is not the new rate because it won't be higher than the current local rate. There will be certain differences. If someone has an old and neglected property downtown, they didn't pay the property but the location price and will now perhaps pay lower tax. Unlike those with modern villas on the outskirts which have enormous value on which appropriate tax will have to be paid."

Asked how the value of construction and farm land would be determined, Linic said this was the government's biggest problem.

"Not (the value) of land that has no purpose, because tax can't be collected on it, but of land that is not in use. It's difficult to determine that value, so we will will need a year to define the value of property that's not in use."

For that reason, "property tax will be introduced in stages. We have huge assistance from the IMF, which has provided experts from around the world who are experienced in that, so there will be no problems," Linic was quoted as saying.

Asked when the final decision on the imposition of property tax would be adopted, he said "that's not up to the Finance Ministry. A political decision is in the government's remit. It must decide what to do with tax on property that's not in use. If someone owns ten flats, lives in one and doesn't rent the others, with which rate to tax that?"