With the aim of realising the idea of standardising the internal policy of the European Union, the Republic of Slovenia follows the path fellow member states took when dealing with real estate taxation. Such unification of real estate taxation is not directly specified or in any other way regulated by the European Union, since it is closely connected to the local regulation of each individual member state. With the mentioned real estate taxation local communities across Europe mostly help finance the public service sector, as this represents a simple way of inhabitants funding a local government’s budget. The real estate taxation in the Republic of Slovenia should be levied on the basis of the generalised market value of the entire real estate. As one of the alternatives the existing literature names a taxation which would be based on the land value. The aim of this graduation thesis is to analyse the possibility of introducing land value tax as an alternative to real estate tax. In 2013 the Real Property Tax Act was passed. The Constitutional Court of the Republic of Slovenia then decided to abolish the Real Property Tax Act and the Real Property Mass Valuation Act due to them being unconstitutional. It would be sensible to unify all the current laws connected to the real estate taxation – the charge for the use of construction land, the tax on property and the tax on use of forest roads – into one individual tax. This is also one of the aims of this graduation thesis. The introduction of an alternative proposal of the land value taxation would lead to administrative procedure being more transparent and simple, which would also result in easier maintenance of the real estate database. The results of the model of forming an alternative taxation, discussed in the graduation thesis, point to the fact of land value taxation representing an instrument of control over land use. One of the aims of the alternative proposal is also the regulation of activities which affect the physical environment and guiding the real estate owners towards a more rational land use. In this manner the land areas would become less interesting for speculations and investments which could lead to a decrease in property values.