New Finance minister of 2nd ODS’s government, Miroslav Kalousek plans to propose government new bill on classification of so called “social housing”. In comparison to previous proposals of CSSD and ODS’s first government, lower VAT for residential should apply to all apartments up to 120 sqm and houses up to 350 sqm. CSSD proposal was for 90 sqm and 150 sqm respecitvely and ODS’s first governement was working with the variant of all residential construction to be included in lower VAT.
Our view:
This specification could fit for over 95% of all new residential construction. We see this news positively, however have to add that until the bill is passed real estate developers will continue to attract clients on possible threat of increased VAT from 5% to 19%, which could help to nail down some of the sale contracts.