When buying a property located in a new residential building, you will encounter the payment of taxes: value-added tax (VAT).
The first apartment is considered to be the apartment, i.e. – the ownership share in the apartment, as well as the ownership share in the family residential building – purchased by a person who does not have, and did not have real estate or ownership share in real estate, starting from July 1, 2006.
The law prescribes benefits for buyers of the first apartment for apartments in new construction. If you are buying an apartment in a new building, then you are obliged to pay value-added tax (VAT), which according to the latest amendments to the Law, is 10%. Value added tax is paid exclusively when buying the first apartment in a new building, because in that way you are the buyer of the final product that was “created” by the investor. Besides that, it is necessary that the agreed price of the apartment with VAT is paid in full to the seller, with the obligatory payment of money to the investor’s account.
If you buy your first apartment (in a new building) directly from the investor, you will be exempt from paying taxes on the transfer of absolute rights, and thus you are able to claim a VAT refund (which you paid through the purchase price).
The exemption is related to the square footage of the apartment, i.e., the buyer of the first apartment is exempt from paying taxes for the area of the apartment up to 40 m2 and for members of their family household (who from July 1, 2006, did not own or co-own real estate in the Republic of Serbia) up to 15 m2. for each member. A family household means all members of one household (spouses, children, parents of the buyer, parents of the spouse…) with the same residence and address as the buyer of the first apartment. If the buyer of the first apartment buys an apartment with an area of e.g., 70m², will have a VAT refund of only 40m², while the remaining 30 square meters of the apartment will be able to receive a refund based on members of their household (15m² for each member), provided that none of them had any property in their own. Also, if you are at the time of buying your first apartment, you also received a VAT refund based on members of your family household (children, spouse, parents), you must know that none of them will be entitled to a VAT refund in the future when buying their own apartment.
The taxpayer for the purpose of exercising the right to tax exemption, along with the documentation, submits a certified statement of the buyer to buy the first apartment for himself, or for himself and certain members of his family household, as well as other evidence from which it follows that the conditions for release on the basis provided by the buyer of the first apartment have been met.
The application is submitted to the tax authority in the municipality on whose territory the company that is the Seller of the apartment is located.
The request for a VAT refund to the buyer of the first apartment is submitted on the RFN Form.
The following documentation is submitted in the application:
- Request – RFN form
- Certified statement of the buyer to buy the first apartment – IKPS VAT form
- Photocopy of the building permit – owned by the seller of the apartment
- Purchase contract – original or certified copy
- Seller’s invoice with the VAT – original or certified copy
- Evidence that the apartment has been paid in full – if the seller is a legal entity – the seller’s bank statement certified by a bank stamp
- Confirmation of the seller that the apartment has been paid in full – original or certified copy
- Birth certificate – original or certified copy
- Certificate of citizenship – original or certified copy
- Copy of ID card – certified
- Certificate of movement of residence from July 1, 2016 – issued by the MUP (Ministry of Interior)
- A certificate that the buyer does not own the property from 01.07.2016 – issued in the tax department according to the place of residence of the buyer – for Kragujevac in the street Branka Radičevića 9 (Svetlosti building) and at the counter number 3 of the Tax Administration
- Copy of the current account card of the applicant
- Certificate of the Real Estate Cadastre that the buyer does not own real estate
If the application also refers to household members listed in the request – it is necessary to obtain forms, 9, 10, 11, 12, and 14 for each listed member. For a minor child, only forms 8 and 9 are needed, as well as a certificate of registered residence from the competent Ministry of the Interior (MUP).
After checking the fulfillment of the conditions for VAT refund, the competent tax authority decides on the request by a decision within 30 days from the day of receipt of the request, and within 15 days from the date of delivery of the decision refunds VAT to the dinar account of the Buyer.
Forms you need:
- RFN form (PDF)
- IKPS-PDV form (PDF)
