Government: Planned building societies to promote new construction

Budapest, March 17 (MTI) – A bill on national building societies, now before parliament, was designed with the aim to boost new home construction, Antal Rogán, the prime minister’s cabinet chief, said on Thursday.

Speaking in the national assembly, Rogán said that passage of the motion into law would contribute to increasing construction, a priority for the national economy. He added that in terms of new housing, Hungary was behind other countries in central Europe.

Fidesz group leader Lajos Kosa told a press conference that the new societies would be “the third pillar” in the government’s home building programme, to complement reduced VAT on home construction and the home purchase subsidy for families.

The bill, submitted on Wednesday, would match 30 percent of society members’ contributions up to 25,000 forints a month. However, the savings could only be used for the purchase of new homes.

Rogán announced plans to establish such societies in January. He said the institution would be based on the model of building societies in the UK, adding that it would give home savings banks some competition.

Hungarians who put money into home savings banks also get a 30 percent state subsidy, but the support is limited to 72,000 forints a year.

The bill would require members to commit to a contribution size and schedule as well as set an upper limit on the price of the property they wish to purchase. No interest would be paid on the contributions.

The price of new homes purchased by members may be between 10 million forints and 40 million forints, though members may make up the difference for more expensive homes in a lump sum upon purchase.