Gov’t to pass law to set up National Building Society

Analysis

The Hungarian government has put forward a proposal to establish a National Building Society (NBS), based on similar models in the United Kingdom, state news agency MTI reported today. According to Antal Rogán, the leader of the Prime Minister’s Cabinet Office, the organization would provide competition for home savings banks.

The government’s justification for the establishment of the NBS is that funds deposited by Hungarians in home savings banks are matched by the government to a threshold of HUF 50 billion annually, however, the resulting savings are not used to buy or build homes. When Hungarians place funds in the NBS, they would be required to purchase a home within ten years, Rogán said.

The proposed bill could be submitted to Parliament as early as tomorrow and would be followed by a vote in mid-March, Rogán said, adding that the organization will launch its operations next year.

According to Rogán, this new organization would complement other measures recently introduced by the government including the reduction of VAT on the purchase and to some extent the building of new homes from 27% to 5%, a new system of home loans and subsidies, as well as simplified rules for obtaining building permits in Hungary.

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