Bill on aid provided to state rental housing

| Reading Time: 2 Min

On 25 July 2021, the government bill on state rental housing aid advanced to the second reading of the National Council of the Slovak Republic in the legislative process. The aim of the proposed bill is to address the problem in the area of housing by enabling the development of state-aided rental housing with a regulated amount of rent and a guarantee for long-term housing.

The bill introduces also certain changes to the Income Tax Act and the Value Added Tax Act . Proposed amendments to the Income Tax Act are as follows:

  • exemption of the state-aided housing allowance from income tax provided in accordance with the Labour Code by the employer to the employee; however, up to a maximum amount of EUR 360 per calendar month;
  • the amount of the state-aided rental housing allowance for employees will be a tax expense at the level of the employer (up to a maximum amount of EUR 360 per calendar month);
  • tax exemption of income from the payment (redemption) of mutual fund shares if more than 36 months have elapsed since the date of their acquisition;
  • a reduced depreciation period of 20 years is introduced for a taxpayer who has developed or procured a building used for state-aided rental housing under precisely defined conditions. In case of non-compliance with those conditions, the buildings will be depreciated over 40 years. The preferential depreciation method shall be applied from the tax period starting on 1 January 2022 at the earliest.

It is also proposed to apply a 5% VAT rate to the supply of a building that is used for the purpose of aided rental housing. The reduced 5% VAT rate will also apply to the supply of the land on which the building stands, as well as to the renovation and reconstruction of such buildings. However, this reduced VAT rate shall not apply to the supply of non-residential premises located in an apartment building for aided rental housing that is used for business and services.

The bill is proposed to enter into effect on 1 October 2021.


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