Minister: Home construction VAT could drop to 5% in 2016
In the event that the Hungarian Parliament passes a proposal for lowering the VAT rate of home construction from 27% to 5% in an accelerated procedure, it could take effect as soon as next year, Hungary’s National Economy Minister Mihály Varga said in an interview with state-owned Kossuth radio this morning, according to Hungarian news agency MTI.
According to Varga, such a move would result in the increase of home construction, and if more homes are built, there would be no income shortfall in the budget, MTI reported. Varga added that the government expects annual home construction figures to rise by 3,000-5,000 from the current 8,000-9,000. Varga reportedly said that in case of a rise of 3,000, there will be no loss in tax revenues, MTI reported.
Hungary’s Prime Minister Viktor Orbán spoke about the lowering of VAT for home construction for the first time yesterday, at the congress of ruling party Fidesz. The prime minister said the proposal would be submitted to parliament today, and the lowered VAT rate would last for four years, MTI reported.
According to data from the Central Statistical Office (KSH) published by online daily index.hu today, home construction in 2014 was 23.16% of pre-crisis levels, dropping from 36,075 in 2008 to 8,358 last year.
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