Value Added Tax (VAT) on property transactions

VAT on property transactions applies to completions of properties built for consideration by taxpayers for that purpose.

This category of VAT applies ipso jure to sales of building land and buildings occurring within five years of their completion by taxpayers for that purpose.

VAT does not apply to sales of land upon which building is not permitted, or buildings completed more than five years ago.

However, sales of such properties by taxpayers may be the subject of optional taxation.

The tax is due by the vendor.

Transactions not subject to VAT are normally subject to inheritance / transfer tax.

The rate of taxation for VAT is 20 % for property transactions.

For completed properties taxed on the total price, the tax is calculated:

• Either on the sale price, the amount of the payment or the value of ownership rights granted in consideration of the contribution, plus fees to be added thereto
• Or on the actual market value of the property, if the market value is higher than the price, the amount of the consideration or the value of ownership rights, plus fees

The following are taxed on the margin if their purchase by a taxpayer did not give rise to any deduction entitlement:

• Sales of building land
• Sales of buildings completed more than five years ago where optional taxation rights have been exercised.