Primarily, it is important to clarify what VAT Refund is:
VAT Refund is the amount of VAT that the state refunds to the purchaser of their first apartment.
Buying your first apartment can often be a stressful process involving the collection of documentation, which can diminish the joy of a significant milestone in an individual’s or family’s life, such as securing housing for the first time.
However, our job is to assist you in this process. We would primarily like to answer some of the most frequently asked questions that first-time apartment buyers who wish to utilize this right may have:
WHO IS ENTITLED TO VAT REFUND when purchasing their first apartment?
The legal right to a VAT refund when purchasing the first apartment applies to every adult citizen of Serbia who has residency in Serbia (at the time of purchasing the apartment) and who has not owned or co-owned any property in Serbia from July 1, 2006, to the present day.
WHAT IS THE AMOUNT OF VAT REFUND when purchasing the first apartment?
The VAT refund amounts to 10% of the total value of the apartment.
WHERE AND WHEN TO SUBMIT THE REFUND REQUEST?
The refund request should be submitted to the competent financial institution, which in this case is the Tax Administration in the area of the seller’s residence, within 30 days from the date of the apartment handover.
DOCUMENTATION USUALLY REQUIRED:
- Request for VAT refund (submitted to the Tax Administration – according to the seller’s place of residence) with the following attachments:
- Completed refund request form – RFN
- Statement on the IKPS VAT form – stating that the purchase is for the first apartment (with notarized statement)
- Certificate that the buyer has not been the owner/tax debtor of real estate from July 1, 2006, until the day of submitting the request from the Revenue Administration of all municipalities where the buyer has been registered
- Purchase agreement of the apartment and confirmation from the seller that the full price has been paid into the seller’s account (copy of transfer order, bank account statement, bank confirmation of the fund transfer)
- Final invoice or receipt showing calculated VAT (ORIGINAL)
- Stamped bank statement confirming that the amount of the price with VAT has been paid into the seller’s account (ORIGINAL)
- Birth certificate (ORIGINAL) and confirmation of the buyer’s citizenship (ORIGINAL)
- Read personal identification card (with notarization)
- Document from the Ministry of Interior confirming all residences the buyer has had from July 1, 2006, until the day of submitting the request (for Belgrade – at 12a Ljermontova Street)
- Confirmation from the cadastre that the buyer does not currently own any real estate
- Copy of the buyer’s bank account card
- Seller’s bank account number
- Seller’s documentation – Construction permit or use permit, joint construction agreement, etc. (copies)
- Apartment handover report
HOW MUCH AREA IS ELIGIBLE FOR VAT REFUND?
Residential space of up to 40 m² that has not previously been in legal circulation, meaning it must be new construction.
However, VAT refund can be claimed for household members, at 15 m² per family member.
For example, if a buyer purchases their first apartment of 100 square meters, where the price per square meter is, for instance, 1000 EUR (including VAT), and there are two additional members in the household, in practice, they should expect a VAT refund for up to 75 m² and receive approximately 7,500 EUR as a tax refund (refund for 40 m² for the buyer and 15 m² each for the two household members).
– Family members include spouses, the buyer’s children/adopted children, stepchildren, adopted stepchildren, the buyer’s parents, their adopters, the spouse’s parents, the spouse’s adopters, and importantly, each of them must have their registered residence at the buyer’s address.
– It should be noted that the VAT refund right can only be used once, and a household member for whom the buyer has received the VAT refund loses this right if they wish to claim it when purchasing their own first apartment.
The documentation submitted by the buyer when claiming an additional VAT refund depends on the relationship of the family member to the buyer.
HOW LONG DOES IT TAKE TO RECEIVE THE REFUND AFTER SUBMITTING THE REQUEST?
– After submitting the request, the Tax Authority has 30 days to decide on the request.
– If your request is valid, you can expect the tax refund and its payment to your account within 15 days, although deadlines may vary. This is the legal timeframe we can anticipate.
Our law office team is available for any additional information, legal advice, or professional services for collecting documentation and submitting VAT refund requests for the purchase of your first apartment, as well as for any other legal matters.
Author of the text: Dejana Colović, Lawyer Trainee