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Govʼt to extend preferential VAT for homes with valid building permits

The government will propose extending the preferential 5% VAT rate on home construction for properties holding a final building permit as of November 1, 2018, until December 31, 2023, Minister of Finance Mihály Varga was reported as saying by state news agency MTI.

Varga said the amendment proposal will be submitted to Parliament this week. Preferential VAT rules in general will continue to apply until the end of 2019. According to these, new single-family detached homes no larger than 300 square meters, as well as homes no larger than 150 sqm in multi-dwelling residential buildings, can be sold at a preferential VAT rate instead of the standard 27%.

The ministry has drawn up the proposed changes based on the suggestions of the National Federation of Hungarian Building Contractors (EVOSZ) and other professional organizations, according to a statement from the ministry.