After a long discussion

Housing and construction offensive: government presents plan

The turquoise-green government has agreed on the housing and construction offensive that has been under discussion for some time. Federal Chancellor Karl Nehammer (ÖVP) and Vice-Chancellor Werner Kogler (Greens) are presenting the planned measures in Vienna today. The first details have leaked out in recent weeks.

For example, a large-scale bonus in the form of subsidized housing loans is likely to be planned. The measures under consideration also include making loan interest on the purchase of a first home tax-deductible. Finance Minister Magnus Brunner (ÖVP) also mentioned the abolition of ancillary fees and real estate transfer tax on first homes up to a certain amount as possible important measures. 

Property developers postpone projects
Recently, there was even a joint initiative by the social partners with the aim of reviving the construction industry, which is suffering from the weak economy, high interest rates and rigid requirements for mortgage loans. Numerous property developers have recently postponed planned projects or suspended them indefinitely, as recently reported by industry giants Buwog and EHL.

Experts: Housing subsidies instead of home ownership bonus
The social partners' proposal to provide private individuals with a maximum subsidy of EUR 100,000 or up to 20 percent of the construction costs for their first apartment or house was less well received by the government. Experts recently argued in favor of earmarking money for specific purposes via housing subsidies.

Plans to use taxpayers to help out all those homeowners who had opted for a variable interest rate despite low interest rates also met with little enthusiasm. Initiatives from the construction and banking sector as well as some politicians to relax the criteria for granting loans were in turn rejected by consumer and debt advisors.