June 3, 2020 3 min read
On 27 May 2020, the Chamber of Deputies supported a government draft bill on cancellation of the real estate acquisition tax, in the first reading. Cancellation of the real estate acquisition tax has effects into the future and only the transfers entered in the Land Register until December 2019 will be subject to the real estate acquisition tax. At the same time, the personal income tax will be adjusted. As a result of the cancellation of the real estate acquisition tax, it will no longer be possible to use deductions from construction savings or a mortgage loan from the tax base. This change will affect housing loans arranged from 1 January 2022. In case of housing needs met before this date, it will still be possible to use deduction of interests. If an entry of real estate in the Land Register is made between December 2019 and December 2021, there will be no duty to pay the real estate acquisition tax and at the same time, there will be the option of deducting interests on a loan for housing needs from the tax based of the personal income tax. The aim is to encourage the real estate market, which has been negatively affected by the coronavirus crisis, and to support the availability of acquiring one's own housing.
The approved amendment also includes prolongation of the time test for exemption of income from the sale of real estate not intended for housing from the personal income tax, from the current five years newly to ten years.
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