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In the case of constructions carried out until December 31, 2022, the VAT on housing construction will once again be 5%, announced Viktor Orbán on Hír TV Hungary live.
Reporting on the government meeting on Wednesday, the prime minister explained that Katalin Novák, the minister without portfolio for families, presented the pillars of a new housing construction program, of which the Cabinet also approved the VAT more favorable to the Home building. He said that tax relief and economic recovery measures had also been decided at the proposal of the economic protection operation. Amendments to the law will also be needed, as simplifying the rules of fiscal procedure and reducing red tape will definitely require it.
What changes can the VAT reduction bring?
Ingatlan.com commented on the change valid until the end of 2022 on the MTI question. According to the analysis of the real estate advertising portal, thanks to the relaunch, with a 5% discount on the housing tax, the momentum of housing construction experienced in the last four years may return.
It was recalled that from the beginning of 2016 to the end of 2019 the reduced VAT rate was already in force, which not only strengthened the desire to build housing in the country, but also tripled the number of homes built: in 2015 only 7,612 new homes were delivered , in 2019 more than 21 thousand apartments were built.
However, the momentum of previous years was broken in the second half of 2020, and by August this year, authorities had already issued permits for the construction of half the residential space than a year ago. And the decline in their number predicted that after 2021, far fewer homes could be built than before.
The ad cited László Balogh, a leading economic expert at ingatlan.com, who said investors could already count on a 5% VAT rate on the rust zone program starting in the big cities, but this only helped. more to the constructions in Budapest. The latest announcement applies to all homes under construction in the country, so the construction of single-family homes and condos for sale could also gain new momentum, the expert added.
How are house prices changing?
The impact of the discount housing tax on prices was noted in the communication, which also depends on the increase in the supply of new homes and the proportion of buyers who buy for their own or investment purposes.
László Balogh also pointed out that due to the risks arising from the VAT hike in 2020, most investors asked buyers for the net purchase price of the property and the current amount of VAT in the pre-contracts. However, due to the reduction in VAT, buyers can pay much less for these properties.
As an example, he mentioned that the gross purchase price of a net property of HUF 40 million with 27% VAT was initially HUF 50.8 million, but if construction is completed by the end of 2022, buyers will only they will have to pay 42 million HUF for it, which represents a reduction of almost 9 million HUF.
At the same time, the expert also pointed out that in some of the construction projects currently underway, a valid work permit was already available in November 2018, so that by 2023 they could be sold at an original rate of 5%. .
It was emphasized that in Budapest, sellers ask an average of 872 thousand HUF per square meter for new apartments and houses. In a significant part of the supply of new apartments in the capital, which includes about 3,000 properties, sellers still expected a VAT rate of 5%, so a 20% reduction in price is not expected. However, the increase in the price of new real estate in the metropolitan area may be slowed by the generally applicable discounted housing tax.
Chocolates can claim 5%
Katalin Novák, the minister without portfolio for families, announced in Kossuth Radio’s Sunday newspaper on October 11 that starting in January, 5 percent VAT will be recoverable on newly built properties bought with chocolate. This means an additional claim of 1.5 million on top of the 6.5 million savings for a 30 million apartment, and an additional 2.5 million for a 50 million apartment, in addition to the 11 million savings, which according to Katalin Novák will definitely stay with the families, because they can claim the VAT content. .
He stressed that with the impact introduced in 2015, the government contributed nearly HUF 500 billion to the creation of more than 150,000 families in the household, and the goal is to be able to help families in the future as well.
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Source: MTI.
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