EU Ministers of Finance will re-discuss today if the exception of lower VAT for housing could be applied in the Czech Republic after January 2008. The prospects doesn’t seem very bright for the Czech Republic as Germany and Denmark are against too many exceptions.
This discussion does not relate to lower VAT for so called “social housing” but housing as general. We are expecting that the exception of lower VAT as it is applied today, across all the residential units, won’t be extended after January 2008 and will be applied only to “social housing”, i.e. apartments up to 120 sqm and houses up to 350 sqm. We see this news as neutral and widely expected.