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The double bonus on building starts

by Ella on February 10, 2020
The double bonus on building starts

Source: Capital.gr

By Spyros Dimitris

The tax bonus on the building that was voted on by the government with the latest tax law also began. Thousands of property transfers are unblocked as a number of issues are resolved to make building one of the most powerful economic recovery agents this year.

Yesterday the two ministerial decisions laying down the details of the three-year suspension of VAT on the delivery of newly built properties were issued. The suspension is for a period of three years, until the end of 2022 and is valid retrospectively, namely from the beginning of 2006, namely, unpaired real estate with a building permit issued from 1 January 2006 onwards.

The first ministerial decision adopted lays down the procedure for granting a suspension of VAT, while the second decision concerns the procedure for the settlement of VAT which has already been deducted by construction companies for a VAT deferral. Instead of a 24% VAT, real estate transfers will be charged for a three-year transfer tax, calculated at a 3% rate on the fair value or quoted price of the contract if it is higher than the fair value.

As the Treasury notes, the VAT suspension measure aims to re-energize the real estate market along with a number of accompanying interventions.

The measures

The other measures to support the government-run building are:

– tax deduction for energy, functional or aesthetic upgrading of real estate. This is an intervention that has been voted on and the relevant ministerial decision is expected to be set out in detail. The deduction will be from income tax and will amount to 40% on the cost of the work and not on the materials. The condition for an owner to receive the deduction is to have paid the relevant fees through the banking system and to have received a tax asset. The maximum expense recognized is EUR 16,000 and the tax deduction is made in four equal annual installments. So for a cost of € 16,000, the maximum discount is € 6,400 which will be broken down to € 1,600 a year. Property used for this tax exemption cannot be included in any other energy or aesthetic upgrading program.

– new and more generous than the previous “Home Savings” program. The program will probably start at the end of this year or early next year.

In the direction of supporting the construction sector and the economy in general, the reduction of ENFIA also works. The tax has already dropped by 22% on average in 2019 and is coming down again by 8% this year.

Source: Capital.gr


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