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5% VAT for new residential properties

The decision-making power of the National Assembly includes also deciding on a low-proposal containing the 5% VAT (over again) for new real estates. Until the end of 2026, 5% VAT can be applied to flats under 150 square meters and detached houses under 300 square meters, for which a building permit has been obtained or construction has been simply notified by the end of 2022.
Based on the online article of portfolio.hu, all this includes the following measures:
The 5% reduced tax rate will again apply to the sale of new residential properties from the 1st of January 2021.
5% VAT is applicable until 31 December 2026, if the building permit has become final latest by 31st of December 2022, or its construction has been notified by that given date according to the simple notification rules.
A reduced tax rate of 5% is applied to the sale of new real estate - if the total useful floor area does not exceed 150 square meters in the case of flats and the total useful floor area of ​​300 square meters does not exceed 300 square meters in the case of family houses. (According to the VAT rules, a property is considered new if it has not yet been taken into use or has been put into use, but two years have not yet elapsed between the time of taking it into use and the time of sale.)
According to the proposal, a reduced tax rate of 5% will apply to the sale of new residential properties until 31st of December 2022.
From the 1st of January, new and used properties purchased using by the so-called CSOK (financial supporting program for Hungarian families, who would like to buy their own flat or family house) will also be free from fees - unrestricted in terms of floor space or market value.
It is important that the amount of the fee paid does not have to be refunded afterwards, but that the fee does not have to be paid in advance.
The exemption applies to sales contracts entered into after 1st of January 2021.

Source: www.hvg.hu and www.portfolio.hu (16.11.2020)
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