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FinMin continues with virus support programs

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The Czech Minister of Finance Alena Schillerova (ANO) continues to hammer out ideas and recommendations for the government to support the country while it is largely shut-down over the Covid-19 virus epidemic.

The first recommendation is to allow people to stop paying mortgages, personal loans and business loans for 6 months. During this period Ms. Schillerova recommends that the interest rates on those loans could be lowered by a “symbolic amount” as to further support the measures from the side of the lenders. In the case of loans, Ms. Schillerova is considering minimizing penalties for missed or non-payment so that people affected by the crisis can avoid being drawn into an even worse situation. The Minister is consulting with the Czech National Bank (CNB) as to do blanket coverage, meaning to all residents or citizens.

The second recommendation from Ms. Schillerova is do away with the 4% transfer tax on real-estate. The tax is charged to the buyer of building. It has been that way since 2016 when the payer was changed from the seller to the buyer. This option would be a big help for people looking to buy a flat to move into. Buyers of new flats, with some restrictions, are exempt from this tax. Ms. Schillerova commented on the fact that short-term flat rentals are sitting empty and many of them are likely to hit the market for sale; long-term rents have already started falling. In order to support people wanting to buy an apartment, as well as get the real estate business moving again, the tax savings would be a large help.

Lastly, Ms. Schillerova and the government have already passed a law in which contract workers, or “Zivnost,” are allowed to avoid making tax deposits for health and social taxes for six months. In addition, contract workers are eligible for a CZK 15,000 monthly stipend if they are adversely affected by the current situation.

The opposition is largely in-line with these adjustments so there is a high potential for the measures to be signed into law.

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