Housing: Union: Lower VAT for social housing

Union: Lower VAT for social housing

IG Bau is in favor of a tax cut for the construction of social housing. Photo: Marijan Murat/dpa

© dpa-infocom GmbH

In view of the federal government’s goal of building 100,000 new social housing units a year, IG Bau is calling for a reduction in VAT.

The industrial union Bauen-Agrar-Umwelt (IG Bau) is calling for a significant tax cut to boost social housing construction.

“The VAT rate for the construction of social housing should be reduced to 7 percent as soon as possible and in a second step reduced to zero percent as soon as this is possible across the EU,” said the federal chairman of the union, Robert Feiger, the newspapers of the Funke media group . Social housing urgently needs a boost. Otherwise, the federal government’s goal of building 100,000 new social housing units a year could be missed.

In order to prevent abuse, however, tax breaks would have to be linked to the fact that the subsidized social housing would remain social housing in the long term, Feiger demanded: “According to the principle: once social housing – always social housing.” In addition, the conversion of existing buildings must be significantly simplified.

A change in the so-called EU Value Added Tax System Directive came into force a good two weeks ago, largely unnoticed. The regular tax rate must therefore be at least 15 percent, and the reduced rate must be at least 5 percent. Complete tax exemptions are only possible in certain areas – since the change, this also applies to food and other goods to cover basic needs. From the point of view of IG Bau, Federal Finance Minister Christian Lindner (FDP) should work to ensure that this is also made possible with construction costs for social housing.

Social and consumer associations have recently called for the abolition of VAT on certain foods. In the traffic light coalition, however, this is met with skepticism.


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