(Hina) - A 50% refund of VAT on the purchase of newly built real estate is one of the measures aimed at enabling affordable housing for young people, Minister Branko Bačić said on Thursday while discussing housing policy measures.
Bačić, who is Minister of Physical Planning, Construction, and State Assets spoke after a government session about the upcoming new proposals in housing policy, based on the National Housing Policy Plan, which was put to public consultation at the end of last year.
This is the first and overarching strategic medium-term document regulating housing in Croatia, and Bačić said that its aim is to enable affordable housing for young people, which is increasingly difficult to achieve given the rising real estate prices in Croatia.
The national plan sets goals for sustainable and quality housing, for which a total of €1.5 billion must be secured by 2030.
"All measures, laws, and subsidiary legislation that we will adopt, mostly during 2025, will focus on four main levers - financial, tax, land, and ecological-energy policies," Bačić said.
The measure currently attracting the most public interest is one that, starting 1 January, exempts young people from paying real estate transfer tax when buying their first property.
Bačić also highlighted as a completely new initiative the exemption from paying 50% VAT when purchasing newly built properties. "We believe this will significantly facilitate property purchases," he said.
Renting state-owned apartments, constructing new ones, and encouraging lease of private apartments
In the first half of the year, measures should be adopted to enable certain categories of citizens to rent apartments at affordable rates.
In that context, Bačić announced the lease of state-owned apartments, which number 1,200 and which would first be renovated.
"These apartments are intended for young families whose monthly incomes do not allow for affordable housing. Affordable housing is defined as a situation in which a household spends less than 30% of its monthly income on utilities and housing costs (loan repayments if they bought the apartment or rent for the apartment)," he explained.
The next step, Bačić added, will be enabling affordable housing in private apartments. Incentives will be used to "encourage citizens whose apartments have been vacant for more than two years" (there are about 600,000 such apartments) to put them on the market.
Bačić is convinced that increasing the supply of such apartments will stop the rise in real estate prices. He also believes this will be supported by the construction of new housing units, primarily through the state-owned Real Estate Agency (APN).
"We will also task local governments with creating their own local affordable housing programmes," he said.
A special programme for providing housing for young families in assisted areas is also being developed. All local government units in assisted areas with significant demand for affordable housing can apply within 45 days of the public call to initiate the construction of housing units in those areas.
"Funds for this have been secured under the National Recovery and Resilience Plan in the amount of €40 million, plus an additional €15 million from other sources. Over the next 2-3 years, we would begin implementing the construction of these apartments," Bačić said.
Should additional funds be needed, the shortfall will be covered by the state budget, Bačić said.
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