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- Ελληνικά
By Harry Polycarpou[/I]
Head of the Economy Section, member of P.G. of AKEL
This is why, after the first answers given by the government, the European Union did not raise any issues, making the government puff itself up with arrogance and hand out statements in all directions that there is no problem with the gold passport investment programme and the loss of tax revenues.
When the Auditor General revealed in his report that the European Commission was withholding information, and the legal framework had changed since 2016, the European authorities realized that once again, after the gold passport debacle, they were faced with a government that was sloppy, amateurish and above all unreliable.
The results of this process will not be paid for by the government but by society as a whole.
The results of this process will not be paid for by the government but by society as a whole. Because not only has the European Commission demanded an immediate change in the law, but it has again brought the risk of fines and sanctions to the forefront, ruining the country. And if the government's ear does not sweat, an entire society is filled with pressure and stress. For it sees the cost of housing rising even further, adding to the increased cost of building materials, stagnant wages, the exorbitant cost of rents especially in urban centres and almost non-existent housing policy programmes.
The government's response to the need to change the law has been as sloppy as its handling of the issue. Without consultation, without reflection, without a basic study of market data, it brought forward a proposal to reduce the eligible area for subsidy to 140sqm only for dwellings not exceeding 200sqm.
With its proposal, the government claimed that it wanted to give the measure a social character, as required by European legislation. Not at all.
With its proposal, a 100sqm apartment in a tower with a seven-figure value is part of its "social" policy. But an average 170sqm home would be charged more VAT than before, and a 201sqm home costing ten times less than a luxury tower apartment would be charged the full VAT. This is what the government describes as a sensible and fair 'social' policy. Tax young couples, but give discounts to millionaire investors who buy luxury apartments on the seafront.
In AKEL's understanding, the philosophy is different. The reduced rate is a social policy measure to help young couples to acquire housing. It is not a marketing tool for mansions and luxury apartments. When we tabled the Bill before Parliament in 2019 we were met with derision from the government. Today the government is isolated in its obsessions and AKEL's proposal meets most of the proposals that have been publicly expressed.
Our proposal has a basic principle, that the system should be simple and understandable and serve the social character of the measure. We therefore propose:
First, that the reduced rate be granted on the basis of the value of the dwelling;
Second, that villas and luxury homes be exempted from the reduced rate;
Third, that those who cannot currently afford to buy or build but wish to extend an existing dwelling should become eligible;
Of course, practical problems may arise. But these relate to implementation and not to the philosophy of the proposal. That is why there is a readiness to consider adjustments to the monetary limits to incorporate changes in costs, based on relevant statistical indicators, and to ensure that couples in the process of building should not be disadvantaged by the new data.
And what is being said about offsetting the responsibilities of the government and parliament is a smokescreen.
What is being said about offsetting the responsibilities of the government and parliament is a smokescreen. Because when you are caught with a goat on your back you don't look at who left the door open.
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Views & opinions expressed are those of the author and/or Cyprus Times
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