Reduced VAT to double number of newly-built homes
The reduction of VAT on the construction of new homes, set to drop from 27% to 5%, is likely to result in an increased offering, cheaper prices, investments with shorter yields, and the growth of employment in the construction sector, Otthon Centrum said in a press statement today.
Prime Minister Viktor Orbán first mentioned the lowering of VAT on home construction during the congress of ruling Fidesz party on Sunday, and the government already submitted a bill on the issue to Parliament yesterday. If the bill is passed, the VAT ratio will be lowered for the period of 2016-2019.
This would mean that the market of newly-built homes would see a drop in price of 5-8%, Otthon Centrum says. This year 8,000-9,000 homes have been built, and, due to the VAT decrease, figures could double in 2016 reaching 16,000-18,000, and continue to increase until the end of 2019. The number of newly-built homes could exceed an annual 10,000, Otthon Centrum added.
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