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Opposition suggests lower VAT on housing construction

The senior opposition Fidesz party suggests that the value added tax on home renovation and on the construction of municipally owned housing units should be lowered to 5% from the current 20%, Chairman Viktor Orbán told reporters on Sunday, news portal reported. Orbán reiterated that a recent decision by the European Union allowed each member state to choose two of six service categories (minor repairs, renovation of private homes, home cleaning for private individuals, home care, hair dressing and municipal housing construction) and reduce VAT on those services.

The opposition party proposes that the government should apply the 5 % VAT bracket in those two categories as of April 1, Orbán said, adding that Fidesz would submit a relevant bill to parliament next week. It is to be hoped, Orbán said, that reduced VAT would result in 15 % lower prices on the housing market.