“Parliament votes to phase out subsidies on home savings bank deposits”

The bill was submitted a day earlier by Erik Bánki, an MP of governing party Fidesz and chairman of Parliamentʼs Economic Committee. 

Presenting the bill on Monday, Bánki said the subsidy on home savings bank deposits - 30%, up to HUF 72,000 a year - had not served the purpose of supporting home construction effectively recently, while home savings banks had pocketed "extra profit" from the subsidy system.

As indicated earlier, the proposal does not affect existing contracts, on which subsidies will be paid until the deposits mature. Earlier Tuesday, it was reported that service providers were experiencing a late rush for home savings accounts, with clients aiming to open accounts before the end of state support for the scheme.

Bánki repeated in the justification of the bill that the subsidized home savings bank deposits have become "inefficient" and "expensive to the state and the taxpayer."

Without the subsidies - expected to reach more than HUF 70 billion this year - the yield on deposits in home savings banks would be negative, Bánki said. At the same time, he added, home savings banks are lining their pockets, booking almost HUF 60 bln in extra profits since 2010. 

Bánki noted that more than 90,000 Hungarian families have availed themselves of HUF 250 bln in grants within the framework of the Home Purchase Subsidy Scheme for Families, known by its Hungarian acronym "CSOK," since the groundwork was laid for the program late in 2015. 

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