BRASILIA (Reuters) - Brazil’s government will extend its “Minha Casa, Minha Vida” low-income housing program into 2015 and build another 350,000 units to boost the building industry, Finance Minister Guido Mantega said on Wednesday.
In moves that pleased the industry ahead of next month’s election, Mantega also announced a four-year extension to a tax break that reduces from 6 to 1 percent the levy on building houses valued at no more than 100,000 reais ($42,400).
The government will build 200,000 units by the end of this year to complete the housing program’s current target of 2.75 million homes, Mantega said. With the additional 350,000 units to be contracted in the first sixth months of next year, the program’s final target has been raised to 3.1 million homes.
The housing program is one of several government initiatives aimed at reducing poverty and social inequality that President Dilma Rousseff has held up as achievements of her administration as she campaigns for re-election.
Mantega made the announcement after meeting with building industry leaders to listen to their demands and seek their support ahead of the Oct. 5 election. The industry had warned of layoffs if more housing contracts were not lined up for 2015.
The government is hoping to prevent Brazil’s entrepreneursfrom throwing their support behind Rousseff’s main rival, Marina Silva, a popular environmentalist who has adopted market-friendly policies and has surged in the polls.
On Monday, Mantega met with executives of Brazilian multinational companies and emerged from the meeting to announce the extension of a 9 percent tax break on foreign earnings for all manufacturers operating abroad.
Reporting by Luciana Otoni and Nestor Rabello; Editing by David Gregorio and Ken Wills