VAT Refund for First Apartment Buyer

If you have bought your first apartment or are planning to, and it concerns an apartment in new construction, according to the law you can exercise the right to a refund of the paid VAT. It must be your first property, purchased from an investor.

To exercise this right to VAT refund, you need to attach the necessary documentation to your VAT refund application, which proves that you meet all the conditions for exercising the right to VAT refund as a first apartment buyer. According to the Value Added Tax Law, the right to VAT refund for the purchase of the first apartment, based on a submitted application, is held by a natural person – an adult citizen of the Republic, with residence in the territory of the Republic, who is purchasing their first apartment.

Conditions for VAT Refund
The first apartment buyer may realize VAT refund under the following conditions:

1. From July 1, 2006, until the date of notarization of the purchase agreement based on which they acquire their first apartment, they did not own, co-own, or have joint ownership of an apartment in the territory of the Republic.
2. The agreed price of the apartment including VAT has been fully paid to the seller by payment to the seller’s current account, or to appropriate accounts in accordance with the law in the case of the sale of an apartment as a mortgaged property, or in enforcement proceedings where payment is made to appropriate accounts in accordance with the law.

The right to VAT refund may be exercised for an apartment whose area for the first apartment buyer is up to 40 m², and for members of their family household up to 15 m² per each member who did not own, co-own, or have joint ownership of an apartment in the territory of the Republic during the period from July 1, 2006, until the date of notarization of the purchase
agreement.

Who Does Not Have the Right to VAT Refund?

1. An apartment buyer who has already realized a VAT refund based on the purchase of their first apartment
2.  A member of the first apartment buyer’s family household for whom the first apartment buyer realized a VAT refund, in the case where that family household member purchases an apartment
3.  An apartment buyer who acquired their first apartment without the seller having the obligation to pay the real estate transfer tax on that apartment transaction based on the purchase of the first apartment
4. A member of the family household of an apartment buyer who acquired their first apartment without the seller having the obligation to pay the real estate transfer tax, and for whom that tax exemption was realized

Required Documentation for VAT Refund

1. Completed application on form RFN, (the form does not need to be notarized)
2. Proof of residence – certificate of residence or certificate of residence movement issued by the competent organizational unit of the Ministry of Interior (original or certified copy)
3. Birth certificate
4. Citizenship certificate not older than 6 months
5. Scanned ID card
6. Apartment purchase agreement (original or certified photocopy)
7. Apartment purchase invoice showing VAT, issued by the seller (original or certified photocopy)
8. Bank statement showing that the full purchase price was paid to the seller’s current account
9. Certificate issued by the seller that the buyer has fully paid the agreed apartment price including VAT (original or certified photocopy)
10. Certificate from the competent tax authority that the buyer does not own residential property (issued in the municipalities where the buyer had residence from July 1, 2006, until the date of apartment purchase)
11. Certified buyer’s statement that they are buying their first apartment (on form IKPS-PDV)
12. Photocopy of the dinar current account card to which the buyer wants the VAT refund
13. Photocopy of the handover record – if the apartment has been moved into (does not need to be notarized)
14. Photocopy of the seller’s construction permit

If the first apartment buyer requests a VAT refund also for a member or members of their family household, in addition to the above documents, they also submit:

1. Document confirming that the natural person for whom the first apartment buyer requests VAT refund is a member of the first apartment buyer’s family household (proof
   of kinship: for children – birth certificate, for spouse – marriage certificate, for parents – birth certificate)
2.  Proof of residence of the family household member – certificate of residence or certificate of residence movement issued by the competent organisational unit of the Ministry of Interior (original or certified copy)
3. Citizenship certificate not older than 6 months
4.  Certificate from the competent tax authority stating that the family household member does not own residential property

In addition to the listed documentation, the tax authority may also require additional documents.

The competent tax authority, after conducting a procedure to verify compliance with the conditions for exercising the right to VAT refund, decides on the application by decision within 30 days from the date of submission, and the VAT refund is made within 15 days from the date of delivery of the decision.