The Government is preparing a bill exempting from payment ofthe full 19 per cent VAT, purchases of undeveloped land for the purpose ofbuilding on it an owner-occupied primary dwelling.
Currently, when someone buys a finished housing unit orapartment as their primary dwelling they pay 5 per cent VAT, whereas buying aplot of land for owner-occupied housing incurs a 19 per cent VAT charge. Lawmakershad called for a change, arguing it is unfair to newlyweds who typically arebuyers of undeveloped land where they plan to build their primary house.
Under a bill being prepared by the finance ministry, suchbuyers would initially pay the full VAT rate, but would subsequently berefunded 14 per cent VAT, so that at the end of the day they pay 5 per cent onthese transactions.
A finance ministry official told MPs on Monday that the billwould be finished in two weeks, at which time it would be presented forratification to the cabinet.
The state budget for 2019 will also need to be amended tofactor in the extra expenditure from the anticipated VAT rebates. The sameofficial said he did not foresee complications, as the additional expendituresarising from VAT refunds would be relatively small, given that the monetaryvalue of purchases of undeveloped building land since the start of the year islow.