The Hungarian government will launch a new, unified property tax in 2009 and not in 2008 as predicted by the finance ministry earlier this week.
The Hungarian government will launch a new, unified property tax in 2009 and not in 2008 as predicted by the finance ministry earlier this week, Finance Minister Janos Veres said on national television Friday.
The government needs more time to prepare the new levy, which will unify five current property-related taxes, Veres said. The level of the new tax will be up to 2% of the value of the real estate.
The five current real estate taxies generate annual revenue of 65 billion forints ($359.9 million), Veres added.
The minister also said that the government may turn the unified property tax into a central levy as opposed to initial plans for the tax to be collected by local councils, and the revenues will also stay at local level.
The government is planning to overhaul Hungary's entire tax system in 2009 with the aim of cutting labor-related taxes and hiking the levies on property and personal wealth.
On the issue of the opposition's planned referendum on several fiscal measures introduced by the government, Veres said the government will have two options for making up the lost revenue in case people voted against the measures.
The government will either have to cut back on education and health care related expenditure, or will have to raise taxes in order to achieve a budget deficit of 3% of gross domestic product in 2009 as set out in the euro convergence program, Veres said.
