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The Hungarian government will provide up to three million guilders ($ 9,693) to each family as help to renovate the house, the latest measure taken by the Budapest Executive to stimulate the recovery of the economy after the coronavirus pandemic, Reuters reports.
“Families with at least one child will be able to recoup half the costs of the renovation works, up to three million guilders,” Family Minister Katalin Novak said, writes agerpres.ro.
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The support provided by the state will cover the cost of works to improve the home’s energy efficiency, renovate the bathroom or kitchen, and expand the home. Novak cited the case of a family with a child who could spend six million guilders on renovation work and save three million guilders.
The announcement comes a week after Prime Minister Viktor Orban announced that Hungary would apply a reduced VAT rate of 5% to home construction projects by the end of 2022 to support the construction sector.
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Hungary, a country with a standard VAT rate of 27%, the highest in the European Union, has also applied a VAT rate of 5% for housing projects from 2016 until the end of last year. The move triggered a property boom in Budapest, which allowed Hungary to grow at a rate of between 4% and 5%.
ING economist Peter Virovacz estimated that next year the budget deficit will rise to 4% of GDP, above the target of 2.9% of GDP included in the 2021 budget. “The move is part of government policy to support families and buildings However, such unique measures cannot reverse the economic impact caused by the coronavirus pandemic, “added Virovacz.
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In the second quarter of this year, the Hungarian economy contracted by 13.6% year-on-year, due to the tighter containment measures in Central Europe, and this year as a whole it could contract by 5% -7%.
The health crisis and a more modest return than expected could become Prime Minister Viktor Orban’s biggest threat in the 2022 parliamentary elections.
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