YEREVAN, January 10. /ARKA/. The Economic Affairs Committee of the Armenian Parliament on Wednesday approved a legislative package on the complete abolition of income tax refund for mortgage borrowers purchasing real estate in the primary market.  

"From January 1, 2027, the refund of this tax will be canceled for Aragatsotn, Armavir, Ararat and Kotayk regions, and from January 1, 2029  for the rest of the regions. Only border settlements will be an exception," Deputy Finance Minister Arman Poghosyan said.

According to him, these benefits (income tax refund in the amount of interest paid on mortgage) apply to buyers of both new apartments and mansions.

According to the previously adopted amendments, from January 1, 2025, these tax benefits will be completely abolished in Yerevan.

Besides,  the maximum amount of refundable income tax is proposed to be reduced from 1.5 million drams to 750 thousand drams.

"Such amount roughly corresponds to a mortgage loan of 30 million drams, which can be considered sufficient for purchasing housing in the regions," the deputy minister said.  

He specified that the new restrictions will not affect the already existing mortgage contracts, their terms and conditions remain unchanged.  

According to Poghosyan, the government's expenditures on mortgage tax refunds are growing year by year. Thus,  in 2022 they amounted to AMD 36.5 billion, in 2023 they  amounted to AMD 52 billion.  

"In four to five years, we can expect a peak of AMD 100 billion. After that, these expenses will start to decrease as mortgage loans are repaid," the deputy minister said.

According to him, it is important for the government to understand what benefits it will receive in return for such large expenditures.

"From a purely social point of view, the question arises why these expenditures should concern the middle class and well-off citizens, and not the needy, who, of course, cannot afford buying apartments," Poghosyan said.  

‘The government wants to return to the idea that was discussed several years ago, when it was proposed to make benefits for citizens not point-by-point, but comprehensively, that is, in the form of social credits.  

"Someone needs more compensation for renting an apartment, someone - for medical expenses and so on. Now the government intends to think about who and what social credits can get," the deputy minister explained.

In his opinion, universal tax declarations, which will become mandatory in the next three years (starting this year, step by step) will be used to assess the needs of citizens. ($1 - AMD 405.48). --0-