In Kazakhstan, they want to cancel the VAT exemption for the sale of housing. According to experts, such measures will force construction companies to raise prices for buyers, reports nur.kz with reference to the portal krisha.kz.

What happened

In Kazakhstan, a draft of a new Tax Code has been developed, which wants to cancel the VAT benefit for the sale of housing. Currently, VAT is 12%, but it does not need to be paid when selling a residential building, excluding non-residential premises, as well as when transferring it for rent or sublease. This rule has been in effect since 2001, now they want to cancel it. Meanwhile, as the portal "Krysha" writes , such an innovation can lead to a significant increase in prices for residential real estate, because developers will try to shift the increased costs to buyers.

What the experts say

The President of the Association of Developers of the Republic of Kazakhstan , Viktor Mikryukov, admits that the cancellation of the benefit will lead to a price increase of approximately 9-10%. Moreover, it will primarily affect real estate of the “economy” and “comfort” classes.

"All taxes will ultimately fall on the buyer as the final recipient. Therefore, in essence, this benefit was not for developers, but for buyers," the expert concluded.

Director of the branch of the Union of Builders of the Republic of Kazakhstan in Astana Vyacheslav Lazarev voiced a similar idea. He believes that after the cancellation of the benefit, developers will have two options: raise prices or stop building.

"Some developers will continue to build without profitability in order to complete the project. But in the future, they will not start construction, since the projects will be unprofitable and the companies will stop earning. This applies to any segment of housing, but especially mass construction," the expert noted.

What did the MNE say?

The Ministry of National Economy said that VAT benefits were introduced to hold down prices per square meter, but they still grew. At the same time, given the market mechanisms of price formation, the abolition of the benefit, in the opinion of the department, will not have a significant impact on the cost of housing.

Infographics

Meanwhile, since 2001, when VAT benefits were introduced, prices for primary housing in our country have increased more than 21 times.

What will happen if the benefits are cancelled?

At the moment, the benefits have not been cancelled. If this happens, then, according to experts, the following consequences could be observed:

• decrease in purchasing power due to increased costs;
• reduction of projects in the economy and comfort classes, which will reduce the availability of housing;
• The slowdown in construction will be followed by an increase in prices on the primary market as a whole: the less supply there is while demand remains, the higher the price.

The code is planned to be adopted in July 2025, and it should come into force in January 2026.

   

The government is considering increasing VAT from 12% to 20%. According to the head of the Ministry of National Economy Serik Zhumangarin, this rate is the most common in the world. At the same time, Prime Minister Olzhas Bektenov noted that along with the increase in VAT, it would be possible to reduce the social tax and pension contributions for employers in order to reduce the burden on them. In addition, if VAT is increased, then perhaps some Kazakhstanis should expect indexation of salaries and pensions so that they do not feel the impact of price increases.

   

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