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Section 4 Outcomes Outcomes Section 4 housing in France, together with a number of other be generated from their services for which a fee is In addition, the Maltese government has introduced a instance a significant increase in funding for the countries for which comparable data are available, is levied. A large number of further reforms to housing number of reforms intended to address property tax Thermal Modernisation Fund, which provides financial set out in TABLE 4.9.1. This table reveals that spending finance arrangements in Latvia are planned. For evasion. As a result of these measures, income tax, assistance to investors to undertake thermal on this area has increased significantly in recent years, instance, arrangements are currently being put in place capital gains tax and stamp duties on property modernisation projects in buildings, has been provided from €15,945 million in 1999 to €19,124 million in for the establishment of a State joint stock company – transfers in Malta are now calculated without any in 2004. Funding for this year will be over 7 times the 2002. the Housing Guarantee Fund – which will be funded reference to liabilities or price residue. In addition, 2003 financial allocation. In addition a number of from the proceeds from the housing privatisation property inherited after 22 November, 1992 (when the reforms to tax on housing have been introduced. TABLE 4.9.1 also outlines trends in public capital programme. Additional budgetary proposals include law on succession was amended) is now subject to tax Formerly a proportion of the expenditure on expenditure on housing in Ireland, and reveals that subsidies to promote energy audits, renovation of when sold, as applies to all other properties. construction of multifamily flats for rental purposes spending in this country has also increased in recent multi-apartment buildings and the construction of was tax deductible. This measure was discontinued at years. The growth in public capital expenditure on affordable housing. In addition, Latvian local Between 1993 and 2003, the government of the end of 2000, on the grounds of excessive cost, social housing between 1999 and 2002 has been authorities devote a large portion of their budget to Luxembourg devoted €1.35 billion to housing coupled with its regressive nature as only relatively particularly high. In addition, a number of significant housing, as they are obliged by law to provide social expenditure. Of this total, €148.4 million (11%) was affluent taxpayers could afford to avail of its benefits. changes have been made to the details of government housing and housing allowances. devoted to capital aid, €443.3 million (33%) to Poland’s accession to the EU has also resulted in a financial intervention in the housing sector in this mortgage interest relief, €184.9 million (14%) to aid number of changes to the VAT regime on housing. country in recent years. For example, the new house Disaggregated data on trends in public spending on for building and approximately €568 million (43% of According to the EU Accession Treaty and the draft grant scheme which provided grant aid to first-time housing in Lithuania or Malta in recent years are not total State aid) was paid out in reimbursement of VAT bill on VAT, the Polish housing sector will continue to owner-occupiers, introduced in 1977, was abolished in available. However, data for 2002 indicate that public on housing. Unlike most other long-standing EU be able to avail of a reduced VAT rate (at 7%) on the 2002. In order to offset the effect of abolishing the spending on loan interest and mortgage insurance in members, the proportion of total government supply, construction, renovation and alteration of grant, changes in the stamp duty levied on property Lithuania totalled LT 17.6 billion. LT 117 billion was expenditure devoted to housing in Luxembourg has housing, until the end of 2007. After then, the reduced transactions and mortgage interest tax relief for first- spent on housing allowances, which accounts for fallen over the last decade. In 1995 housing VAT rate will be restricted to social housing. However, time owner-occupiers were introduced. In addition, the 90.5% of all government subsidies, and spending on expenditure accounted for 2% of total State from 1 May 2004, the VAT rate for all construction lower rate of VAT, which applies to construction in subsidies for refurbishment came to LT 3 billion. A expenditure, but by 2004 this had fallen to 1.31%. materials increased to 22% from its present level of Ireland, was increased from 12.5% to 13.5% with further key reform to the fiscal treatment of housing in 7%. effect from 1 January 2003. The Irish government Lithuania was recently introduced as a result of the Details of recent trends in government expenditure on restored tax incentives for the supply of private rented implementation of the Law on Income Tax of housing in the Netherlands and Poland are provided in TABLE 4.9.1 also provides details of government accommodation, which had been briefly abolished in Residents. This measure reduced VAT reduced from TABLE 4.9.1. This table reveals opposite trends in housing expenditure in Portugal in recent years. It 2001; following this reform the heretofore rapidly 18% to 9% for the construction and renovation government housing expenditure in these countries. reveals that spending on this area has increased from increasing rent levels in Ireland began to moderate. funded by central or local government. In the Netherlands spending on each of the 4 main €899.9 million in 1998 to €942.6 million in 2002. The housing subsidies has grown each year between 2001 latter figure represents around 2% of the Portuguese In Italy, the fund for building at special rates, managed In 2003, government expenditure on housing in Malta and 2003. By contrast, in Poland total government government’s total expenditure. by the Ministry of Infrastructures and Transport, was accounted for 0.4% of total government expenditure. expenditure on housing has fallen from 2,815.2 million established. This Fund covers tax incentives for firms This was distributed as follows: zloty in 1995 to 1,902.7 million zloty in 2003. As a In Romania, the State budget for 2004 totals 351,292 that build or restructure dwellings to be rented out. In Latvia, the proportion of government expenditure ■ 40% was taken up by the subvention to the housing authority; consequence, the percentage of GDP devoted to housing has fallen from 1% in 1995 to 0.2% in 2002, while the proportion of total central government billion ROL. Of this, 4,494 billion ROL will be spent on new housing (1.28% of all expenditure, compared with 0.76% in year 2000). Other housing-related devoted to housing community amenities and ■ 30.3% was spent on major repairs to government expenditure devoted to housing has also been reduced expenses include: 2,495 billion ROL to be transferred environmental protection has grown slightly in recent tenements; from 3.1% to 0.9% between these years. The Polish to local authorities as co-financing for infrastructure years to 5.4%, although most of this increase is related to the advent of EU co-financing of environmental projects. The budget allocations for housing have been ■ 16% was devoted to upgrading works in housing estates; government has also introduced a comparatively large number of changes to its system of housing finance. Many of these changes were enabled by decreases in projects within the new residential areas, 420 billion ROL for paving roads and supplying water in rural areas, 82 billion ROL for implementing the cadastre devoted principally to the establishment of the ■ 12.2% was devoted to interest subsidies, and the subsidies related to past obligations – including system, 39 billion ROL for completing or updating Housing Agency and the Housing Development Unit within the Ministry of Regional Development and Local Government (see Section 2.16). It is envisaged ■ 1.5% was dedicated to other aspects of housing including rent subsidies. guaranteed premiums on savings-for-housing booklets and the (so called) ‘old portfolio’ co-operative loans. This has enabled an increase in the proportion of State urban development plans, and 3,350 billion ROL as heating energy subsidies. that additional funding for both of these agencies will expenditure devoted to new housing measures. For In Slovakia, State expenditure on housing totalled 168 European Union Report Regular National Report on Housing Developments in European Countries 169
Section 4 Outcomes Outcomes Section 4 6,904 million SKK in 2003, rising to 7,120 million therefore, represents 2.6% of the State budget. In introduced, including a VAT reduction, which are maximum benefit from limited public expenditure SKK in 2004. As TABLE 4.9.1 demonstrates, this addition, as mentioned in Section 2, the regional intended to encourage renovation of long-term vacant resources; previously only local authorities in debt constitutes 2.8 and 2.5% of total government spending governments in Spain have very significant powers in dwellings. From the financial year 2004/05, the Local were allowed to avail of these additional resources. in these years respectively. As part of a programme of relation to housing and they provide resources to Government Act 2003 enables local authorities to The formulae for determining the level of management tax reforms in January 2004, a single rate of 19% rate implement their own housing policies, by means of abolish the 50% discount on council tax, which is and maintenance allowances for local authority of VAT was introduced. Slovakian legislation no longer grants supplementary to those provided by central available to owners of long-term vacant housing. The housing have been reviewed. The new formula provides for the application of differentiated rates of government or by means of specific housing measures, rationale for this reform was that the availability of the represents greater equity between various local VAT. Arrangements for the funding of social housing funded by their own budgets. In 2002, joint investment discount provided a ‘perverse incentive’ which authorities in financing these activities and recognises have also been amended and government grants for by central and regional governments in Spain encouraged owners to keep the dwellings in question the costs of managing and maintaining void properties, this sector have been replaced with payments made amounted to €1,856,977. empty. The pooling of housing capital receipts which continues to recognise the costs of managing and within the social benefits system which is legislated for are generally derived from the sale of local authority maintaining flats, but no longer treats proportion of in the Act on Material Need. In addition, changes to In 2003, the total public expenditure for housing rented dwellings to tenants became effective on 1 April flats in a local authority’s stock of dwellings as a key budgetary procedures have been introduced which construction subsidies (consisting mainly of interest 2004. This measure will enable the redistribution indicator of deprivation, recognises the fixed costs of allow unused funds in the current budgetary year to be subsidies for the rental and co-operative sectors) and resources between local authorities, according to need. small authorities and includes a crime indicator to used in the following budgetary year for the same housing allowances in Sweden was SEK 16,600 The pooling of capital receipts will apply to all acknowledge costs associated with anti-social purpose. This system is particularly useful for projects million, representing 0.7% of GNP for that year. authorities, debt free and with debt, to secure behaviour. funded from the housing development support Housing allowances accounted for approximately 90% programmes. of this expenditure. The value of tax reductions and the income from property taxes and other taxes are In recent years, the government of Slovenia has not included. allocated €6 million annually to the Housing Fund for the payment of premiums to households that have The most important change to State housing finance in participated in the long-term savings scheme (5 or 10 Turkey in recent years is the abolition of the Mass years) in commercial banks so as to acquire a dwelling. Housing Fund as part of the implementation of the In addition, the Slovenian government has allocated ongoing economic stability programmes. As a result, funds to local authorities amounting to about €21 public housing investment became dependent on million per annum in recent years, for the construction allocations from the general budget and the financial of non-profit housing and for subsidising rents. VAT resources of the State housing development company – on the construction of non-profit housing in this TOKI. Plans are currently in train for measures to country is only 8.5% as compared to the general address the comparative underdevelopment of the taxation level of 20%. Owner-occupiers may claim an mortgage lending market in Turkey. TOKI is currently income tax relief of 3% on the funds they invest in the initiating the necessary legal and administrative purchase or construction of a dwelling or in the regulations for creating a mortgage finance mechanism maintenance of their dwelling. in Turkey and has prepared a new decree obliging private banks to raise their funds for long-term Information on direct government expenditure on finance. housing in Spain is provided in TABLE 4.9.1. This table reveals that spending in this regard fell from €29,666.2 Data on housing expenditure by government in the million in 2001 to €2,434.3 million in 2002. The United Kingdom as a whole are not available. budgetary allocation for housing in 2003 represented However, information is available regarding 0.3% of the total State budget. This percentage, government expenditure on the principal housing however, does not include indirect benefits (i.e. tax programmes in England in 2002/2003, together with reliefs) provided to homebuyers. The sum of housing projected expenditure for the 2003/2004 period. It tax benefits represented 2.26% of the non-financial reveals that total expenditure on housing will grow by expenditure budget in 2003 and the total budgetary STG£3,724 million in the 2003/2004 period. Also in expenditure on housing and housing tax benefits, England, a range of fiscal incentives have been 170 European Union Report Regular National Report on Housing Developments in European Countries 171
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REGULAR NATIONAL REPORT ON SYNTHESI
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Regular National Report on Housing
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Table of Contents Table of Contents
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Definition of Terms New Member Stat
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Section 1 Introduction and Summary
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