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Starting at the beginning of the year, the range of state family benefits will be expanded with new elements. One of the important measures, in addition to starting the home renovation program, is to reduce the VAT on newly sold properties to 5 percent, which offers an additional thrill if we also demand the chocolate, which is already associated with the construction of attics.
the Index Now it has gathered everything you need to know about the latest family real estate purchase, construction, expansion and renovation options since the beginning of the year.
1. VAT on new homes was reduced to 5%
Starting January 1, 2021, the new property sales tax will be reduced from 27 percent to five percent. In addition to the net amount, we only have to pay 5% VAT if:
- we are buying a newly built property;
- or we are building a new house, a new property.
The conditions that we have to meet for 5% VAT from the moment we have to buy the property after January 1, 2021:
- in the case of a home, it should not exceed 150 square meters;
- if it is a house, it cannot be more than 300 square meters.
What exactly counts as an apartment purchased after January 1, 2021?
Here, on the one hand, it should be noted that all newly built properties for which a building permit has been issued at the end of 2019 are already subject to a 5% tax rate.
If the newly built property is delivered after January 1, 2021, i.e. technical delivery, the works are completed after January 1, the VAT content will also be 5%. Even if in 2020 the sales contract was concluded.
In other words, what matters here now is when the property is delivered and when payments are made.
The 5% VAT relief will not have an indefinite duration, according to current regulations it will be valid for all construction permits issued until December 31, 2022, and even then the 5% VAT option may only be exercised until the end of 2026.
The ones who build themselves
They are not subject to the VAT exemption rules. As of January 1, 2021, the VAT content can be claimed up to 5 million HUF if someone builds it themselves.
2. Creation of houses totally free of taxes and VAT
If the new property meets all the points listed in each point, for the purchase of which we will even use the chocolate from January 1, we can claim this 5 percent VAT. In other words, the purchase of the newly built property will be totally free of VAT from January 1, if we add the chocolate to the side.
It is important to know that a VAT refund can be sent at the same time a CSOK is requested.
In addition, in the case of properties purchased by check, the total amount of the tax will be exempted. In this case, the exemption does not have to be requested separately, the authorities will automatically release the fee. However, please note that the tax exemption only applies to sales contracts entered into after January 1, 2021.
A concrete example of how much families can save with all this:
If someone buys a property worth HUF 30 million plus VAT, this current option means that the 27 percent VAT will be reduced to five percent, reducing the previous eight million VAT to one and a half million florins. If, in the meantime, the family or young couple also add the chocolate for this purchase, they can claim this million and a half guilders. At the same time, there is a full tax exemption after purchase, which means an additional saving of 1.2 million HUF. In other words, the end of the story can be a savings of more than 9 million guilders if you buy a 30 million guilder property.
Only those who use a village chocolate in one of the 2,500 specified small settlements can use the VAT refund for their own solid constructions. Otherwise, the aid can only be requested for the purchase of a new property made entirely by another contractor.
3. You are already living with home improvement support
The last state family support announced by the minister without family portfolio, Katalin Novák, in mid-October, can be requested by those who are raising at least one child and want to renovate, modernize and beautify their own home.
The home renovation program will reimburse half of the renovation costs up to HUF 3 million in arrears. In the closing months of last year, the Index answered readers’ most frequently asked questions about the terms of the home renovation program, which begins January 1, 2021, in a four-part series of articles.
Starting February 4, a home renovation loan will be available
If you wish, in addition to post-financing support for home renovation, you can also use the home renovation loan option as of February 1, 2021. This is especially for those who do not have enough money to renovate their own apartment .
The main parameters of the loan for home renovation:
- up to a maximum of 6 million HUF can be claimed,
- with a maximum maturity of ten years, and
- for a mortgage loan with a maximum interest rate of 3%.
5. With the help of the state, an attic can be built over the heads of the parents.
When the government and Katalin Novák, head of the program, talk about supporting multigenerational homes, all this means, in practice, state aid in the form of a kiss, which can be requested for the installation of the attic.
If the attic of a house is built, where the young family or the young couple who are about to have children settle, they will create their own home with a separate entrance, which will become their property. For this, the chocolate is now also paid in full.
As a reminder, the amounts of chocolate are:
- 10 million HUF non-refundable in case of having three children,
- 2.6 million HUF for two children,
- and the aid for a child is 600 thousand florins.
In addition, a loan of 10 million HUF for two children and 15 million HUF for a large family can be requested, in addition to the support used for the installation of the chocolate in the attic.
+1. Maximized notary fees
Another novelty is that notary fees are also maximized for those who buy real estate by check since the beginning of the year.
This year, house prices also began to fall, not only did demand fluctuate due to the epidemic.
(Cover Image: Katalin Novák, Minister Without Portfolio for Families, at a press conference on another large-scale element of the housing construction program at the Ministry of Human Resources building on Szalay Street on October 28, 2020) .
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