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Parliament lowers home construction VAT rate to 5%

Residential

Photo by Virrage Images / Shutterstock.com

Parliament voted unanimously on Tuesday to lower the VAT rate for home construction from 27% to 5% in 2021-2022, according to a report by state news wire MTI.

Photo by Virrage Images / Shutterstock.com

The VAT cut, one of a number of government measures that aim to support first-time home-buyers as well as help the construction industry recover from the coronavirus crisis, will be in force for a period of two years from January 1, 2021. However, the preferential rate will still apply to projects with a building permit at the end of the period as long as they are completed by the end of 2026.

The legislation also exempts purchases of new and resale homes supported by the Home Purchase Subsidy Scheme for Families (CSOK) from duties.

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