ECONOMY

VAT suspension boosts building permits

vat-suspension-boosts-building-permits

The rising course of construction continued in July, despite a lack of demand in the property market due to the pandemic.

Data released by the Hellenic Statistical Authority (ELSTAT) on Monday showed that total construction activity amounted to 2,116 building permits, corresponding to 479,200 square meters of surface area and a volume of 2.25 million cubic meters. This constituted an increase of 12% in permits, of 3.8% in surface area and 7.5% in volume compared to July 2019.

Not including state construction activity, the results of private construction in July were quite impressive: Permits increased by 11.7% to 2,102, surface area by 9.7% to 475,100 sq.m. and volume by 17.3% to 2.226 million c.m.

In volume terms, there was a great range of shifts in activity across Greece, with construction increasing particularly in the regions of Thessaly, Central Greece and the Ionian Islands: Thessaly boasted a rise of 226.4%, Central Greece followed with 138.9% and the Ionian Islands with 74.8%, year-on-year.

In Attica there was a moderate increase of 6.9%, while the Northern Aegean posted a 75.6% decline and Western Macedonia showed a 70.7% drop.

In any case, the suspension of the 24% value-added tax on new construction permits until 2022 appears to have motivated constructors across the country, who are eager to create a stock of building permits exempt from VAT.

Therefore despite the recession due to the pandemic, in the first seven months of the year private economic activity in permit terms expanded 15.4% year-on-year, with surface area increasing 18.8% and volume 20.6%.

In the 12-month period from August 2019 to July 2020, private construction recorded a 19% rise in building permit numbers, a 19.5% advance in surface area and a 21.6% increase in volume, compared with the corresponding period from August 2018 to July 2019.

In those 12 months the number of building permits came to 18,761. This corresponds to 4.1 million sq.m. of surface and 18.03 million c.m. of volume. In comparison with the corresponding period from August 2018 until July 2019, there was an 18.9% increase in the number of building permits, a 17.0% increase in surface and a 17.8% increase in volume, ELSTAT figures showed.