'Resource' bill proposes abolition of VAT privileges for business for resale of apartments in secondary market – Finance Ministry.

A bill with amendments to the Tax Code on ensuring the balance of budget receipts ("resource" bill No. 5600) proposes the abolition of VAT benefits for business entities involved in the resale of apartments in the secondary market, Finance Minister Serhiy Marchenko has said.

"The norm of the draft document is aimed at business entities that have a business for the resale of apartments in the secondary market and create non-competitive conditions for developers, since they do not pay VAT. This norm does not apply to individuals, since they are not VAT payers," Marchenko explained in a comment to Interfax-Ukraine.

He also stressed that the specified norm will not affect housing prices.

At the same time, the first sale of new housing will continue to be subject to VAT. There is also a benefit for the first sale of affordable housing and housing built for public funds.

Marchenko also noted that the increase in the rate on income of individuals to 18% provided for by the bill applies only to income received from the sale of the third and subsequent real estate objects within one year.

"This rule does not apply to ordinary citizens. The sale of three or more properties per year is a business," he stressed.

At the same time, the current personal income tax rates for the sale during the year of the first property (0%) and the second (5%) remain unchanged.

As reported, bill No. 5600 also proposes not to tax the income of individual borrowers of the Affordable Loans 5-7-9% and Affordable Mortgage 7% programs.

Interfax-Ukraine

News about recent political developments in Ukraine, key Ukrainian economic news and major current events in the CIS and the rest of the world.

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