According to Euro24, EU prolonged current exception of lower VAT for housing even after January 2008, even though Germany and Denmark initially opposed this exception. Czech Republic however doesn’t plan to apply this exception after January 2008 for all housing as the state budget for 2008 counts already with lower VAT from social housing and higher VAT from upper market housing. Our view: The decision of EU came as a surprise for us, however is should not have any effect on the real estate developers due to the option of Ministry of Finance not to apply this exception after January 2008.