The money you invest in purchasing the selected property is not small. Therefore, it is essential to be well informed about all the obligations and benefits you have when buying property for the first time.

Anyone planning to buy an apartment – in new construction or old construction should be well informed about the currently applicable Law of the Republic of Serbia regarding the purchase of real estate for first apartment buyers.

A first apartment buyer is any individual who has not owned real estate (an apartment or a house) in their name since July 1, 2006, and has not been a co-owner of a part of a family building, house, or apartment. At the moment you purchase your first property, you gain benefits related to exemption from tax payment.

Who and when is entitled to a VAT refund for the purchase of real estate?

According to the Law, the right to VAT refund is granted to any individual who is a citizen of our country with residence in Serbia and is at least eighteen years old, meaning the buyer is an adult.

There is a rule regarding the prescribed square footage of the apartment for which the buyer is entitled to a refund of value-added tax (VAT). Namely, a first apartment buyer is entitled to a VAT refund for 40 square meters, while their household members (spouse, children…) who do not own real estate in their name are entitled to a tax refund for an additional 15 square meters.

It should be noted that household members who are included in the VAT refund when purchasing an apartment lose the right to be exempt from paying the tax on transfer or VAT refund when they purchase their first property.

The right to a VAT refund is available to the first apartment buyer who purchases real estate from the investor, meaning the apartment is being sold for the first time on the real estate market.

What documentation is submitted for VAT refund?

Regarding the deadline, the buyer can submit a written request to the Tax Administration within 30 days from the date of signing or certifying the purchase agreement.

The first apartment buyer needs to provide the necessary documents:

– original birth certificate

– notarized purchase agreement

– original citizenship certificate

– photocopy of the buyer’s ID card, which must be certified by an authorized person as proof that the buyer has residence in the territory of the Republic of Serbia

– photocopy of the card clearly showing the buyer’s current account number

– statement from the buyer that this is the purchase of their first apartment, certified by a notary

– confirmation from the local government that you do not own real estate since July 1, 2006.

When the first apartment buyer includes household members for the VAT refund, the relevant tax branch needs to be provided with the following documents:

– birth certificates

– marriage certificate (for the spouse)

– citizenship certificate

– photocopy of the ID card

– confirmation of residence

– certificate that no real estate is registered under the household members since July 1, 2006.

If all conditions are met, the competent tax authority, i.e., the director of the branch will prepare a final decision on the tax refund within a month from the date of the request submitted by the buyer, and 15 days after the decision is delivered, the buyer can expect the payment to their dinar current account.

The agency Heroldo Real Estate provides an additional service for collecting and submitting the necessary documentation for VAT refunds to all interested clients.