The five-percent housing construction VAT will be extended by two years - this was announced by the Prime Minister on Kossuth Radio. Thus, the favorable tax rate will remain until the end of 2024. The measure can keep the construction industry going, which, according to the profession, also means security for contractors, it was said in the M1 News.

In January 2016, the government introduced the reduced VAT rate of five percent for the purchase of newly built apartments. Builders could use the opportunity until 2019. During this time, the number of housing constructions almost tripled and new jobs were created.

After a one-year hiatus, Katalin Novák, then minister responsible for families, announced the relaunch of the program in January 2021. In addition to the creation of homes, this gave the Hungarian economy another boost. The construction industry contributed 0.7 percentage points to GDP growth, and the number of employed people increased by 25-30 thousand. The government does not stop the process.

In the future, every Hungarian family will receive electricity and natural gas at reduced utility prices, but only up to the average consumption, Viktor Orbán said on Kossuth Radio.

"We have developed a series of measures to try to prevent the approaching trouble," Viktor Orbán said on Kossuth Radio.

Hungary has an open economy, so the impact of a global economic recession cannot be avoided, which is why the government is trying to find as many solutions as possible to deal with the situation. Viktor Orbán said: one of the planned measures is the extension of the discounted housing VAT.

"We made the decision that it will not end on December 31, but we have extended the housing VAT for another two years, because we saw that a lot of people accelerated their housing construction, began to hurry, submitted permits in the hope that they would still fit into this to the current deadline. There is no need for this, there is no need to rush, the government will ensure that in the next two years, the housing construction market, which is otherwise unfortunately slowing down, will be supported with this five percent VAT," said Viktor Orbán.

"The extended preferential housing VAT will not break the momentum of building new apartments," said László Koji.

The president of the National Association of Construction Contractors told M1 that 20,000 to 25,000 apartments can be expected to be handed over every year, so residential and real estate developer orders will remain.

"The government postponed approximately HUF 1,200 billion from state investments. This would be missing from the life of the construction industry in order for it to remain in momentum. According to our calculations, this measure may be sufficient for the construction industry to fulfill and build approximately HUF 5,500 billion in 2023 as well," the president added.

With the reinstatement of the 27 percent VAT, household savings would no longer have been sufficient to build new apartments, said László Koji, who also emphasized that interest rates on housing loans should also be kept close to the five percent level. That is why they expect the Magyar Nemzeti Bank to extend the green home program and to subsidize home renovations for energy purposes at favorable interest rates.

Source: hirado.hu

Featured image: MTI