Opposition parties accuse govt of tailoring housing policies to suit business interests

Budapest (MTI) – Hungarian opposition parties on Saturday accused the government of tailoring its housing policies to suit the business interests of companies close to the ruling Fidesz party.

Parliament decided on Tuesday to reduce VAT on newly built residential property from 27 percent to 5 percent effective 2016-2019.

The Socialist Party insisted profits from the construction sector generated by the reduction of the VAT on new-build homes will go to companies close to the government.

The government decided to introduce measures to boost the construction sector only after it had gained significant influence in the industry, Zoltan Lukacs, the party’s deputy parliamentary group leader, told MTI. The government can “only do something good” if it also gains from it, he said, arguing that the move to boost the construction sector was designed to generate profits for construction companies such as Magyar Epito owned by Lorinc Meszaros, the mayor of Felcsut, Prime Minister Viktor Orban’s hometown.

The leftist opposition Democratic Coalition said the VAT reduction would favour “Fidesz-friendly oligarchs”.

Party spokesman Zsolt Greczy said the poor in Hungary “will soon hardly be able to afford bread”, let alone build a 300sqm or a 150sqm home. Greczy said the VAT reduction law is filled with loopholes that will allow construction companies to make millions of forints worth of profits off of a measure that was “supposed to” support families. There are already a number of “Fidesz-friendly oligarchs” doing business in the construction sector, he said, citing construction company PBE Epito, in which the prime minister’s son-in-law has a vested interest.

The Dialogue for Hungary party said the government should also support the community housing sector, arguing that many people would not benefit from the VAT reduction.