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Tax break for young couples buying land for first home
April 17, 2018
The government has submitted to parliament a draft bill indirectly exempting from payment of 19 per cent VAT young couples who buy land for the purpose of building a primary residence.
The issue is related to the passage of a law last November imposing 19 per cent VAT on building land.
In its wake, persons buying a finished housing unit or apartment as their primary dwelling must pay 5 per cent VAT, whereas purchasing a plot of land for owner-occupied housing incurs a 19 per cent VAT charge.
Now, the new bill provides that, whereas newlyweds buying land for owner-occupied housing will pay the full tax rate, 14 per cent of the VAT imposed on the value of the land would be returned to them in the form of a grant, so that ultimately they pay only 5 per cent VAT.