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Higher VAT is more threathening to real estate market than property tax

Approximately 10% of apartment owners will be affected by the 2010 property tax eventualized last week – a wider target than than the 5% estimated by government. However, taxing the real estates of more than HUF 30 million worth alone will not redraw the market – say the experts of Otthon Centrum.

In Otthon Centrum's database 27.5% of the residential real estates (35% in the capital) is offered for more than HUF 30 million, which would be subject to taxation from 2010. Naturally bigger chains have wider range of precious real estates, or in other words, very cheap (selling for only a couple millions of forints) are under represented. 

„We estimate the amount of luxury apartments worth more than HUF 30 million about 10% nationwide, adding that the ratio can be higher in Budapest and its agglomeration” says Tibor Nagygyörgy, CEO of Otthon Centrum. „Property tax concerning real estates itself will not redraw the market, although it will surely be the last drop in the bucket of expenses for some. We do not expect the taxable properties to appear en mass on the market.” 

Naggyörgy added that sellers of aparments that are priced just above HUF 30 million will have to lower their financial expectation. The same will be true for new investments, where developers will have to set a new price model based on the new taxation. (Gazdasági Rádió)