FEATURE: Few Private Owners Choose to Enter Public Rental Housing Service

By , 09 Aug 2022, 10:41 AM Business
FEATURE: Few Private Owners Choose to Enter Public Rental Housing Service Photo: Flickr - TaxRebate.org.uk

Share this:

STA, 9 August 2022 - There seems to be little interest among housing owners in renting out their property through a public rental housing service that the national Housing Fund set up this year to increase the number of flats available at not-for-profit rents. As a result, the fund has sub-rented out only six units so far.

The fund published a call for owners to join the scheme in February, after the housing act changes were passed in May 2021, and is open until the end of the year.

A total of 29 providers of housing from across the country responded until last Thursday - 27 individuals, and one municipality with two flats, the fund told the STA.

Until that day, the fund accepted six offers, but failed to find common ground with the other owners, mostly because they find the rent to be "too low".

The rent is set on the basis of parameters such as the size, age, state of repair, and fixtures and fittings, and capped at 1.3 of the non-profit rent for that apartment.

The flats, measuring 36-80 square metres, for which the contracts have been signed are located in various parts of the country, and were rented out at EUR 148-344 a month.

A 130-square-metre house near Ljubljana will meanwhile be rented out at EUR 396, the fund said.

Apart from owners finding the rent too low, the fund believes that to secure more flats - 200 is the target in the ongoing call, legislative changes would be needed because owners have problems obtaining the documents they need to enter the scheme.

What is also needed is "a change in mentality among owners to opt for a form of public rental that may not be as profitable as commercial rents, but offers security of tenure, proper management and predictable business relationships".

The Environment and Spatial Planning Ministry agrees the documentation (especially the occupancy permit, which older buildings often do not have) and a big gap between the expected and offered rent are a problem.

While admitting the number of units entering the scheme will be lower than the 100 planned for the first year, the ministry said that "a more detailed analysis and assessment will be carried out on the basis of the Housing Fund's annual report for 2022".

The ministry considers the response from interested parties "satisfactory" although the share of those who opt to sign the rent-out contract is "relatively low".

It will draft legislative changes "if the need for them becomes apparent", but will first meet the fund's representatives in the autumn to finds ways to encourage owners to enter the scheme.

Zoran Đukić, director of the real estate agency Stoja Trade, sees the state's decision to set up a public rental service as an excellent idea, it is just that the state did not approach it in the most appropriate manner. He believes the low interest is a result of too low a rent for housing owners and its too high taxation.

Đukić says that owners entering the public rental service scheme should have the rents obtained taxed at a lower rate than is the standard rate.

Another issue is who takes care that housing units do not get damaged when there is an intermediary between the owner and the tenant, while he also believes that owners should be better informed of the possibility of renting out through the public scheme.

Photo galleries and videos

This websie uses cookies. By continuing to browse the site you are agreeing to our use of cookies.