Exemption from VAT for first-time home buyers

VAT refund for buyers of the first apartment

The Law on Amendments to the Law on Value Added Tax, which entered into force on July 8, 2007, stipulates that the right to a VAT refund for the purchase of the first apartment, based on the submitted request, has the right to a natural person – an adult citizen of the Republic, with residence in the territory of the Republic, who buys the first apartment.

The buyer of the first apartment can obtain a VAT refund under the following conditions:

1) that from July 1, 2006 until the date of certification of the contract of sale on the basis of which the first apartment is acquired, he did not own or co-own an apartment in the territory of the Republic;

2) that the agreed price of the apartment including VAT has been fully paid to the seller. The right to a VAT refund can be exercised for an apartment whose area for the buyer of the first apartment is up to 40 m², and for the members of his family household up to 15 m² for each member who did not own or co-own an apartment in the territory of the Republic in the period from July 1 2006 until the date of certification of the sales contract.

If the buyer of the first apartment buys an apartment with an area that is larger than the area for which he is entitled to a VAT refund, he can realize the right to a VAT refund up to the amount corresponding to the previously mentioned area.

The family household of the buyer of the first apartment is considered to be the community of living, earning and spending the income of the buyer of the first apartment, his spouse, the buyer’s children, the buyer’s adopted children, the children of his spouse, the adopted children of his spouse, the buyer’s parents, his adoptive parents, the parents of his spouse, the adoptive parents of the buyer’s spouse, with the same place of residence as a buyer of the first apartment.

There is no right to VAT refund:

1) a buyer of an apartment who received a VAT refund based on the purchase of the first apartment;

2) a member of the family household of the buyer of the first apartment for whom the buyer of the first apartment received a VAT refund, in the case when that member of the family household buys the apartment;

3) the buyer of an apartment who acquired the first apartment without the obligation of the seller to pay tax on the transfer of absolute rights based on the purchase of the first apartment in accordance with the law regulating property taxes for the sale of that apartment;

4) a member of the family household of the buyer of the apartment who acquired the first apartment without the obligation of the seller to pay tax on the transfer of absolute rights based on the purchase of the first apartment in accordance with the law, which qualifies as the buyer of the first apartment.

There is no right to VAT refund:

1) a buyer of an apartment who received a VAT refund based on the purchase of the first apartment;

2) a member of the family household of the buyer of the first apartment for whom the buyer of the first apartment obtained a VAT refund, in the case

when that member of the family household buys an apartment;

3) the buyer of an apartment who acquired the first apartment without the seller’s obligation to pay absolute transfer tax for the sale of that apartment

rights based on the purchase of the first apartment in accordance with the law regulating property taxes;

4) a member of the family household of the buyer of the apartment who acquired the first apartment without the obligation of the seller to pay tax on the transfer of absolute rights based on the purchase of the first apartment in accordance with the law regulating property taxes, and for whom that tax exemption was achieved Competent the tax authority, according to the procedure carried out, issues a decision on the refund of VAT to the buyer of the first apartment and is obliged to keep records of the buyers of the first apartment and the members of the family households of the buyers of the first apartment for whom the buyers of the first apartment have realized VAT refund, as well as the amount of VAT refund.

The right to a VAT refund to the buyer of the first apartment can be exercised only on the basis of the apartment sale contract certified after the entry into force of this law, ie on July 8, 2007.

The Rulebook on the procedure for exercising the right to a VAT refund and on the manner and procedure of VAT refunds and refunds prescribes that the buyer of the first apartment obtains a VAT refund in accordance with the Law, based on a written request submitted to the competent tax authority.

Apartments, in the sense of this rulebook, are considered to be residential buildings, economically divisible units within those buildings, as well as ownership shares in those goods.

The competent tax authority is an organizational unit of the Tax Administration that is responsible for receiving the registration application of the VAT payer – the seller of the apartment in accordance with the Rulebook.

The request for a VAT refund to the buyer of the first apartment is submitted on Form RFN – Request of the buyer of the first instance for VAT refund. The following shall be submitted with the request:

1) extract from the birth register;

2) citizenship certificate;

3) proof of residence (certified photocopy of an identity card or certificate of residence);

4) a certified copy of the agreement on the purchase and sale of the apartment;

5) an invoice or other document that serves as an invoice for the purchase and sale of an apartment in which VAT is stated;

6) proof that the contracted price of the apartment including VAT has been fully paid;

7) certified statement of the buyer of the apartment that he is buying the first apartment.

If the buyer of the first apartment requests a VAT refund on the basis of a member or members of his family household, he shall also submit:

1) a document confirming that he is a natural person on the basis of which the buyer of the first apartment requests a refund in VAT member of the family household of the buyer of the first apartment (proof of kinship)

2) proof of the residence of a member of the family household (certified photocopy of an identity card or certificate of residence). The declaration of the buyer of the apartment to buy the first apartment is given on the Form IKPS VAT – Declaration of the buyer of the apartment to buy the first apartment. the VAT refund is decided by decision on the request within 30 days from the date of submission of the request, and within 15 days from the date of delivery of the decision, the VAT refund is made.