Three solutions to ease impact of VAT on housing after EU membership

The government is considering three solutions for easing the impact of increasing VAT to 22% on the construction sector after Poland joins European Union (EU). One solution is to broaden the definition of so-called social buildings to which 7% VAT is applied. Other concepts include returning the VAT to the final investors, or to reopen the relevant chapter of EU membership negotiations. According to Ryszard Matkowski, vice president of the Office for Housing and Urban Development (UMiRM), the first solution is the easiest to implement and is being analyzed by the Government. The second idea would mean returning the difference between 7% and 22% VAT to the final investors - i.e. those who buy a house or build their own homes. Representatives of the construction sector warned that 22% VAT could provoke a dramatic increase in the price of apartments and be a real catastrophe for domestic construction market. (Zycie, p. 7) A.D.