If the legal conditions for levying a local development fee are met, the local fee administrator is obliged to levy it

On May 22, 2025, the Supreme Administrative Court of the Slovak Republic, by judgment no. 4Sfk/68/2023, dismissed the cassation complaint regarding the levying of a local development fee. It stated that if the legal conditions for levying a local development fee are met, and the law or a subsequent generally binding regulation does not recognize exceptions, postponements or waivers, the local fee administrator is always obliged to levy it.

A concrete company wanted to build a hall for processing reinforcing steel in the municipality of Horný Hričov. During the construction procedure, the municipality introduced a local development fee for the entire territory of the municipality by a generally binding regulation. Since the building permit for the construction of the hall for processing reinforcing steel was issued only after the generally binding regulation on the local development fee came into effect, the municipality also revoked it. The concrete company argued before the administrative and cassation courts in particular that the municipality acted purposefully. The municipality, as a building authority, did not comply with the deadline for issuing the building permit and delayed the process of issuing it so that it was issued only after the generally binding regulation on the local development fee came into effect, which made the company obliged to pay this fee.

The Supreme Administrative Court assessed in particular whether the municipality’s procedure in issuing a building permit can be taken into account in proceedings for the imposition of a local development fee under the Local Development Fee Act in conjunction with the relevant generally binding municipal regulation.

In the opinion of the Court of Cassation, the Local Fee Act and the relevant generally binding municipal regulation do not recognize exceptions, postponements, or exemptions from the levy for development. If the legal conditions for levying a local development fee have been met, the local fee administrator is obliged to levy it. The Local Development Fee Act thus does not allow the municipality to take into account the fact that investment plans, applications, or other decisions on construction or implementation of a building were adopted at a time when the development fee was not known, or the law from which the municipality was able to introduce a development fee was not in effect. The statutory regulation in this regard does not open up any other possibility of interpreting the relevant provisions.

The law stipulates that the subject of the development fee is a building on the territory of a municipality for which a valid building permit has been issued. After the municipal development fee has been introduced by a generally binding regulation, the municipality may levy a development fee on a building with an issued building permit, as of the date of effect of the generally binding regulation of the municipality. The building permit of the concrete company entered into force at the time when the relevant generally binding regulation of the municipality on the local development fee had already been adopted and entered into force. According to the Court of Cassation, the company thus incurred a fee obligation. The communicated irregularities in the construction procedure (whether intentional or negligent in nature) cannot be taken into account in the procedure for levying a development fee. The municipality, as the administrator of the local development fee, had no legal possibility of taking into account the alleged errors in the procedure of the building authority in the procedure for levying a development fee, because this procedure is a separate and independent procedure from the construction procedure.

If the concrete company was of the opinion that due to purposeful delays in the construction procedure it incurred damage consisting in the imposition of a local development fee (which would not have been imposed on it in the regular course of the construction procedure), it had the opportunity to assert its right through an action for compensation for damage caused by incorrect official procedure of a public administration body.

The Court of Cassation, in agreement with the public administration bodies and the administrative court, stated that the conditions for the emergence of a fee obligation were formally met, the municipality had no other option than to impose the fee and proceeded in this direction legally.

This decision was adopted by the Panel of the Supreme Administrative Court unanimously, no appeal is admissible against it.

The decision was made by Panel No. 1 of the Supreme Administrative Court, composed of: President of the Panel JUDr. Marián Fečík, Judges JUDr. Jana Hatalová, PhD., LL.M. and JUDr. Katarína Cangárová, PhD., LL.M.