House Buying Blog

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Czech Housing Market Set To Rise

March 15th, 2007

The Czech government have recently announced that they are to increase VAT on purchases starting from January 2008. The new laws will increase the rate from the current 5% to 19%. Obviously with such a massive leap in fees, it would make sense to purchase property in the country under the old tax regime.

Experts predict that the news will fuel property price increases by 13% across the country in 2007.

If you are not in a position to buy until after the new tax laws are enforced, there is one option that you may wish to consider. Basically the government have dictated that any new build housing that is under 90 M2 in size will be categorised under the moniker “social housing” and these types of dwellings will be exempt from the new tax hikes.

From a social perspective it is to be welcomed that citizens on a lower income will be helped onto the housing ladder by reduced fees, however, from an overall building infrastructure perspective it is unknown what effects the new tax regime will produce. Commentators speculate that new property developers will build smaller properties as a norm in order to be exempt from fees. Whether this is beneficial in the long term for purchasers or indeed aesthetically appealing will only be borne out over time.

 

 
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