Hungarian Lawmakers Pass Law On VAT Cut For New Home Building
- 16 Dec 2015 8:00 AM
Lawmakers approved a bill to reduce value added tax (VAT) on new-build homes from 27% to 5% between 2016 and 2019. Submitted by Economy Minister Mihály Varga and cabinet chief Antal Rogán, the law states that a 5% VAT rate applies to homes built between 2016 and 2019, mainly applying to blocks of flats built in housing parks with an area of less than 150 square meters each or to standalone homes smaller than 300 square meters.
Reducing the VAT on new homes is aimed at providing affordable accommodation to every Hungarian family, Rogán said in the parliamentary debate. He said that people building their own homes will have an opportunity to reclaim the VAT on building materials up to 5 million forints (EUR 15,770).
He also announced that in future builders will not be required to apply for a permit for structures smaller than 300sqm. Reducing the VAT on new homes from 27% to 5% will in the long run generate higher revenues for the central budget, a state secretary at the economy ministry told public television M1.
According to the government’s expectations, some 5,000 new homes could be built from January on, involving an investment of 100-120 billion forints (EUR 315m-379m) and creating between 5,000-7,000 new jobs, Ágnes Hornung said.
Source www.hungarymatters.hu - Visit Hungary Matters to sign-up for MTI’s twice-daily newsletter.
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