Bill Proposes to Phase Out Subsidy on Home Savings Bank Deposits
Fanni Kaszás 2018.10.16.
A bill, submitted by a Fidesz MP yesterday, seeks to phase out the state subsidy on deposits with home savings banks. The bill may be approved today and come into effect on Wednesday.
Erik Bánki, the bill’s sponsor, said on Monday the subsidy on the home savings bank deposits – increased 30 percent up to 72,000 forints (EUR 222) a year – had not effectively served its purpose of supporting home construction recently, while home savings banks had pocketed “extra profit.” The Fidesz MP said that existing contracts are unaffected by the bill and subsidies on these will be paid until the deposits mature.
Bánki, who heads Parliament’s economy committee, said in the justification of the bill that the subsidized home savings bank deposits had become “inefficient” and “dear to the state and the taxpayer.” Deposits in home savings banks account for just one-third of all state-subsidized savings, but they eat up three-quarters of total state subsidies on savings, he noted. Bánki added:
Because of the typically small amount [saved] in the construction, few homes are built from the savings. In a number of cases, the savings don’t event got to home purchases, because they can also be used for the construction of a swimming pool or a sauna when the contract matures.
Without the subsidies, expected to reach more than 70 billion forints (EUR 217 million) this year, the yield on deposits in home savings banks would be negative, he said. At the same time, home savings banks are padding their pockets, booking almost 60 billion (EUR 186 million) in extra profits since 2010, he added.
Bánki noted that more than 90,000 Hungarian families have made use of 250 billion forints (EUR 776 million) in grants in the framework of the Home Purchase Subsidy Scheme for Families with children, known by its Hungarian acronym “CSOK”, since the groundwork was laid for the program late in 2015.