Construction Ministry suggests plan for unblocking residential constructions

The Ministry of Construction and Territorial Development put forward an anti-crisis program aimed at unblocking the residential construction sector in Moldova, with the state investing in unfinished constructions being one of the priorities, Info-Prim Neo reports. The plan covers 200 buildings, 75 out of which are close to being finished. An estimated US$200 million will be needed for the first 30-35 blocks. This money could be obtained from foreign donors. “The persons who invested money in the construction of dwellings will receive them. Instead of the investments, the state will obtain a certain number of apartments that could be later distributed to vulnerable groups of people,” the Minister of Construction Vladimir Baldovici said in an interview. According to the official, such a step will stimulate demand for building materials. “Only a general solution can change the situation,” he said. There are several possible government involvement schemes. One of them is to grant preferential loans to certain companies that will provide long-term mortgage. Another measure is to postpone the refunding of the VAT for a period of two years and introduce zero VAT for residential constructions. The Construction Ministry says this will enable to reduce the cost of a square meter of dwelling by 14%. The Ministry also proposes fixing the profitability level on the construction of dwellings from attracted resources at maximum 5%, improving the quality of the building materials, providing exemptions on the yearly income tax for families that purchase the first apartment, selling lots for construction at normative prices during the next three years, creating the center for price formation in the construction sector, etc. As many as 212,200 square meters of dwelling have been put in commission this year, down 10% from a year earlier. The population’s investments in dwellings made up 83.3% of the 2008 volume.