Bill would phase out subsidy on home savings bank deposits

A bill submitted by a Fidesz MP seeks to phase out the state subsidy on deposits with home savings banks.

Erik Bánki, the bill’s sponsor, said on Monday, said the subsidy on the home savings bank deposits, 30 percent up to 72,000 (EUR 222) forints a year, had not effectively served its purpose of supporting home construction recently, while home savings banks had pocketed “extra profit”.

Existing contracts are unaffected by the bill and subsidies on these will be paid until the deposits mature, he added.

Bánki, who heads Parliament’s economy committee, said in the justification of the bill that the subsidised home savings bank deposits had become “inefficient” and “dear to the state and the taxpayer”. Deposits in home savings banks account for just one-third of all state-subsidised savings, but they eat up three-quarters of total state subsidies on savings, he noted.

“Because of the typically small amount [saved] in the construction, few homes are built from the savings. In a number of cases, the savings don’t event got to home purchases, because they can also be used for the construction of a swimming pool or a sauna when the contract matures,” Bánki said.

Without the subsidies, expected to reach more than 70 billion forints this year, the yield on deposits in home savings banks would be negative, he said.

At the same time, home savings banks are padding their pockets, booking almost 60 billion in extra profits since 2010, he added.

Bánki noted that more than 90,000 Hungarian families have made use of 250 billion forints in grants in the framework of the Home Purchase Subsidy Scheme for Families with children, known by its Hungarian acronym “CSOK”, since the groundwork was laid for the programme late in 2015.

Source: MTI