One hundred, then 30, and finally 50. Like at a market, the potential area and price of residential properties eligible for support for young people have been bid on in recent months as part of the amendments to the Law on Encouraged Housing Construction, which was voted on today in the Parliament.
Initially, it was proposed that the right to receive support (50 percent VAT in the case of new construction or the entire property transfer tax for old construction) would not be attainable if the contracted price of the residential property was 100 percent higher than the average price per square meter of an apartment defined by the Law, or if the usable area of the residential property was 100 percent larger than the area prescribed by the Law. After criticism, these amounts were reduced to 30 percent in both cases. However, the HDZ parliamentary club, in a superhikov manner, proposed an amendment that increased those figures back to 50 percent. And of course, that amendment was adopted.
Ultimately, taxpayers will finance the purchase of luxury and above-average sized properties, despite warnings from experts that such a measure will only further fuel demand, and thus prices. The explanation provided by the HDZ parliamentary club in the amendment is completely surreal:
– It should be emphasized that in some cities, especially on the coast, the price of new construction that cannot be considered luxury exceeds the average property price by more than 30 percent, so this increase would ensure that all young people who wish to do so can actually buy an apartment in new construction. Finally, in smaller cities, only larger apartments, from 70 square meters and above, are being built, so this would enable, or facilitate, the purchase of new construction in such cities – states the explanation of the amendment.
From the above, it is evident that the HDZ representatives have not even read the law for which they are voting and proposing an amendment, as Article 30.d states that the average price per square meter of an apartment will be determined for each unit of local self-government, not the average price at the state level. Therefore, their explanation that it is necessary to provide support for apartments 50 percent more expensive than the average price in a given city has no justification.
Furthermore, even with the variant that it is possible to receive support for an apartment 30 percent larger than prescribed, a couple could buy an apartment of 84 square meters, which is a very decent property by Croatian standards, and is also larger than the 70 square meters they refer to. In the adopted variant, a couple with the means or creditworthiness to buy 97.5 square meters in new construction at a price 50 percent higher than the average in a given city will receive support from the state. More precisely, 10 percent of that amount will be financed by taxpayers.
Thus, the state will once again help those who need it most: couples who “can barely make ends meet” while buying three-bedroom apartments of nearly one hundred square meters in new construction, and at prices significantly above the market average. And those who can’t even dream of a loan? They can patiently wait – for an uncertain measure of renting private apartments or for the construction of affordable apartments from local self-government, which is currently more of a concept than a reality.
