CzechPosition: VAT will not cripple the housing market

Czech Point 101 November 27, 2014 @ 1:35PM


Czech VAT change to affect renovations more than housing prices.

Czech VAT change predicted to affect home renovations more than housing prices themselves.

High-level overview of article:
The higher tax will negatively impact people planning to modernize their housing; this group far exceeds purchasers of new projects.

Our take:
I do believe that the current record low or almost record low interest rates plus this increase in VAT will spur a small panic in new construction buying as it did in late 2007. However, there are enough negative factors on the market that will counter the effect. We would stand by our predictions made regarding property prices in our 2011 Czech property forecast.

What is true is that this VAT change will be a big blow to developers such as CPP who are sitting on an already difficult project to resell which was priced during the peak of construction and land costs.

Between these VAT changes and the solar panel fiasco (where many residential developers turned when the housing market fell), the Czech government is not making many friends among real estate developers!

Updated/Aktualizováno: ,

1 Comment

  1. Lewes

    This is a nice post. I’m a realtor in Lewes, DE and do most of my real estate business in Sussex County.


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