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Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.

He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.

In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.

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• Hungary 2000
  
• Hungary 2000, 2
  
• Hungary 2001
  
• Hungary 2003
  
• Hungary 2004
  
• Hungary 2005
  
• Hungary 2006
  
• Hungary 2008
  

The New Year in Hungary will witness an important change in the tax regime, introducing 25% VAT for the building plots for residential uses instead of current 0%. So far the plots represented between 10 and 20% of the total building costs, thus the new taxes alone are expected to increase the residential prices for new constructions by 3-5%. More moderate increase is expected also to happen on the resale market in order to keep the existing parity between the new and old residential properties. The main reason behind the new tax measure is to harmonize the Hungarian legislation with the relevant EU directives. Other taxes, paid by the buyers, are expected to remain without change in the coming months. They include a sales tax on residential properties between 2 and 6% depending on the property value as well as 10% for commercial purpose buildings. The VAT for commercial properties now stands at 25%, but the companies can claim VAT in their tax returns. Individual buyers will suffer the most from the new legislation because they can't reclaim any VAT on goods and services. It's better for anyone planning to buy in Hungary in the coming months to do it before the new tax comes into effect. If this can't be done by the end of the year and the property under question isn't a plot, then it will be better not to wait until the market adjusts to the new reality, expected to take place during the first 2-3 months of 2004. At least the new investors can purchase a plot and if the contract is submitted to the Land Registry before the end of 2003, it will remain exempt for VAT. What matters here is the date of submitting, not the date of signing the contract.

As for the coming EU membership and its effects on the market, there are conflicting views among the general population and specialists. The "pessimists" hold that the EU membership won't significantly change the trend of gradual price increase. They argue that Hungary can't soon reach real estate prices equal with those in the rich EU countries because it will lose its comparative economic advantages in the eyes of the western investors. They point out at the fact that the Hungarian companies have already begun exporting capital into cheaper markets. On the other hand, the "optimists" argue that the best years for investment are still to come, and that given the gap between income and prices in Hungary and the rest of EU, the market will go up until the prices reach parity with Western Europe. Neither side expects major fluctuations on the market; the main difference between these points of view is the price levels the residential market can reach in mid-term.

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