VAT on sale of flats will be reduced from 18% to 5%. The decision on reduction of this tax rate was adopted by the Government today, and the Parliament is expected to adopt it next week.

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As Prime Minister Nikola Gruevski said, 5% tax rate will apply on all flats that are going to be sold after the amendments to the VAT Law come into force, i.e. the reduced tax rate will also apply on flats already built, the sale of which will take place after the amendments are adopted.

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– This measure will have several positive effects. In conditions of crisis, it will stimulate the construction of flats by the construction companies, thus contributing to recovery of the construction industry, as well as of other 20 and so branches related to the construction of residential buildings, such as craftsmanship, industry, production of furniture and other related to the construction of flats and residential buildings, Prime Minister Gruevski said.

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He added that this measure would also provide for reduction of the prices of flats by around 13%, helping the citizens resolve their housing issue. – Greater supply of flats on the real estate market, as well as direct effect from the reduced tax rate, are expected to lead to reduction of the total price of flats, thus making them more affordable to the citizens in the Republic of Macedonia, Prime Minister pointed out.

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One of the positive effects expected from this Decision is the revival of the real estate market in Macedonia, which, as Gruevski said, is one of the driving forces of the economic development of each country. According to him, this will, in addition to reduction of the tax rate, also provide for positive effects at budget revenues. Budget tax revenues on this basis amount to around Denar 10 million to Denar 11 million.

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VAT reduction at sale of flats, as Prime Minister Gruevski said, was a long-standing request from the Macedonian Chambers of Commerce.(MIA)

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