Hungary's Constitutional Court on Tuesday ruled that the parts of a tax law on high-value properties affecting homes were unconstitutional.
The court withdrew the parts of the tax that affect homes with retroactive effect. The parts of the tax affecting boats, aircraft and high-performance cars will remain in place.
Government spokesman said after the court's decision that the government is examining how and how quickly to remedy deficiencies noted by the court with changes to regulations, as well as how to counter the fall in revenue.
The government welcomed the fact that the court found the principle of property tax as such constitutional.
The government had expected the property tax to generate about HUF 50 billion in revenue in 2010.
The court found problems with the way the value of homes subject to the tax is calculated and when it is calculated, and the law gives the tax authority unlimited power to decide on the amount of the tax to be paid, which goes against the principle of legal security.
The court also said the law did not take into consideration the income of taxpayers subject to the tax, which could put some in an impossible situation. (MTI-ECONEWS)