The much-discussed issue of the imposition of a reduced 5% VAT for the purchase or construction of a main residence will be put before the Plenary Session of the Parliament on June 8, as part of social policy, as the parties are close to an agreement regarding the compromise formula, for which they expect the comments of the Ministry of Finance.
The Parliamentary Committee on Finance was informed today by the competent authorities, the Commissioner of Taxation, the President of ETEK and the Director of the Department of Urban Planning, in the presence of a representative of the competent Ministry of Finance, still making an effort to find a compromise formula, so that an agreed proposal can be brought to the Plenary Assembly of the body, the which can be accepted by the European authorities.
To delete apartment-house separation
According to information from StockWatch, the parliamentary parties seem to be converging on the abolition of the criterion for the separation of properties between houses and apartments, provided that the Ministry of Finance agrees.
Also, after a session of more than three hours, it was agreed that the Ministry of Finance should examine and submit its positions, in relation to a proposal that would "marry" the recommendations of DISY and DIKO-DIPA, including elements from AKEL's proposal.
Specifically, the Ministry of Finance is asked to consider a proposal that provides for a reduced VAT of 5% on all properties up to 150 sq.m. and worth up to €350 thousand.
For properties that exceed 150 sq.m., i.e. from 151 sq.m. and up to 200 sq.m., the value of which does not exceed €475 thousand, 5% VAT will be paid up to 150 sq.m. and 19% in the rest of the area.
For properties that exceed both these value and square meter limits, 19% of the first square meter will be imposed.
The representative of the Ministry of Finance, Naya Symeonidou, pledged that the response of the Ministry of Finance on this specific proposal will come within the next few days.
The parties which as a whole expressed their intention to reach a common proposal, stated that the relevant proposal should be approved by their collective bodies.
He also clarified during today's debate the issue of transitional periods, with all parties seeming to agree that it will be four months from the submission of the application for the urban planning permit and not the issuance of the building permit that was provided for in the original bill.
Compromise is necessary
In statements after the closed session of the Commission, the President of the Commission, Christiana Erotokritou, stated that it was agreed to bring the final text to the Plenary for a vote on June 8.
The aim, as he stated, is to have a legislative framework that stops the violation procedure that the Republic is facing from the EU institutions and that is much more expanded than the original one submitted by the previous government.
He pointed out that all the parties come to the conclusion that some compromises must be made in order to have a common constitution without overstepping principled positions.
He said the Committee expects the position of the Ministry of Finance next Monday.
On behalf of DISY, Savvia Orfanidou stated that the Commission's informal proposal resolves the problem of separation between apartments and houses, which was a red line for DISY. She added that her party cannot accept this separation, as apartments are now the most affordable option for families.
Mrs. Orfanidou also said that DISY is ready to contribute to the conclusion of a unanimous decision and added that "apartments are increasingly becoming the most affordable option for the lower and middle classes, whom we all have to support more".
For his part, AKEL Member of Parliament Andreas Kavkalias emphasized that the government is expected to submit an opinion, noting that "until today it is hiding". a right and fair arrangement under the circumstances, a regulation that mainly protects the low and middle social strata and on the other hand closes loopholes that remain open and allow millions of transactions to purchase luxury apartments to be granted the reduced rate of 5% VAT".
The president of EDEK Marinos Sizopoulos referred to the spirit of consensus and compromises that was shown in order to find a solution, while the MP of DIPA Alekos Tryfonidis emphasized the need to ensure the incentives for young people to stay in rural housing.
DIPA MP Alekos Tryfonidis said, among other things, that his party will work "consensually and constructively but in a short period of time so that on June 8 we can vote on this legislation which is so important for the development of the country as well as the protection and support for young couples".
The MP of the Environmentalist Movement, Stavros Papadouris, asked that party and political expediencies be left behind and added that it is unnecessary to separate apartments and houses that would lead some population groups to pay the 19% VAT.
Concerns about DISY's proposal
It is worth mentioning that initially in today's session both the Ministry of Finance and DISY insisted on their positions regarding the issue of calculation criteria, with the representative of the Ministry pointing out that the proposal of the Democratic Alert cannot be considered as targeted since it covers 75% of homes and stressed that a proposal with more criteria would be more easily approved by the EU.
For his part, DISY MP Onoufrios Koullas supported his party's position saying that the exercise of social policy is the responsibility of the member state.
Specifically, DISY proposes the universal imposition of 5% VAT on real estate for the first €350 thousand with a value of up to €500 thousand. For real estate with a value over €500 thousand, the proposal foresees that 19% VAT will be paid from the first cent.
To help find a compromise, the Association of Property Valuers tabled a proposal whereby the reduced VAT is calculated first on the basis of values.
In particular, he recommended the imposition of a reduced VAT of 5% on the first €350 thousand, for properties with a maximum value of €500 thousand, with a maximum area of 220 sq.m. For any residences worth more than €500 thousand, DISY recommends that from the first euro, the VAT be attributed to 19%.
It is worth mentioning that the bill which is before the Finance Committee provides for apartments: 5% VAT for the first 90 sq.m. and total area up to 110 sq.m., with an apartment value of up to €220 thousand and for residences: VAT 5% for the first 200 sq.m. and total area up to 220 sq.m. with house value up to €385 thousand.