ArmInfo. The Association of Armenian Developers (AAD) believes that today's government's decision to gradually cancel the income tax refund program within the framework of mortgage lending for individuals will lead to a decrease in demand for housing in the primary market and, ultimately, to a reduction in state treasury revenues and an increase in labor migration.
In a statement issued by the Association, it is noted that the issue was included on the agenda of the government meeting without proper discussion with interested structures, without organizing public discussions: the project was not posted in advance on a single platform of legal acts e-draft.am. The AAD called this approach reprehensible, "because until now, at all meetings with the ministries representatives of the Association of Armenian Developers have been assured that only after a thorough discussion with all interested parties a decision will be made on the appropriateness and format of these changes." The authors of the statement emphasize that in this context, the thesis that these changes are aimed at promoting the uniform development of the republic's territories in terms of urban planning and economy is perplexing, since "soon each of us will feel the negative consequences of the decision." "The decision will lead to a decrease in demand for housing in the primary market and, as a consequence, to a reduction in the volume of development and construction in this area, which, in turn, will affect budget revenues, job cuts, labor migration, economic activity, and a reduction in investment'', the statement reads.
It should be reminded that today at a government meeting, amendments to the RA Tax Code were approved, which provide for a gradual abandonment of the income tax refund program within the framework of mortgage lending in the territory of Yerevan. As a result, the benefit under the program will be canceled from July 1, 2022. From that moment on, income tax will not be returned to those citizens who decide to purchase an apartment on a mortgage in the 1st zone of Yerevan (center). From January 1, 2023, the income tax refund will be canceled for those who purchased housing in the 2nd zone, from July 1, 2023 in the 3rd zone. From January 1, 2025, the benefit will be canceled throughout the capital. The proposed restrictions will apply to individual and multi-unit residential buildings built on the basis of building permits issued after January 1, 2022. As noted by the head of the Ministry of Finance Tigran Khachatryan, the program for the return of income tax within the framework of mortgage lending was introduced more than 5 years ago. In the past two years, the number of its beneficiaries has increased dramatically. So, if in 2015-2017 the beneficiaries of the program were 800 people, in 2018-2019 - about 2000, and in 2020 - already 5200. Now the total number of beneficiaries exceeds 17 thousand people, of which only 7% are in the regions. By the end of this year, the number of beneficiaries will reach 20 thousand people.
