Ministry of Finance to abolish immovable property acquisition tax
The Ministry of Finance has announced its intention to abolish the tax on immovable property acquisitions and at the same time cancel tax deductions for new mortgages.
The ministry is planning to submit its proposal at a government’s session in the week of 6 April. It proposes to abolish the immovable property acquisition tax and to cancel the possibility to deduct from the tax base interest on new mortgages pursuant to the Income Tax Act. Further changes in this area can also be expected.
At present, immovable property acquisition tax is paid by the buyer, amounting to 4% of the tax base, determined specifically according to the manner in which real property has been acquired, i.e. purchase, transfer, auction, or insolvency.
The cancellation of interest deductions should neither apply to contracts that have already been concluded nor to contracts that are new but have only been concluded to refinance existing mortgages.
Based on information from the Ministry of Finance, the bill should be effective retroactively, on the date it is approved by the government. More detailed information is not yet available. We are monitoring the situation and we will keep you informed about any developments in this respect.