Tax rate for the turnover of a residential building which is prefabricated, with land

If the VAT payer makes the first transfer of the right to dispose of a newly built building for housing – a prefabricated house with land (under the object and which serves the regular use of that object), is applied posebna stopa PDV-a od 10%. Namely, in that case it is immovable property, which is also discussed in the Opinion of the Ministry of Finance, the excerpt of which is quoted below.

OPINION OF THE MINISTRY OF FINANCE

number number 011-00-832/2020-04 of 12 January 2021 1. 2021.

“The turnover of a prefabricated house intended for housing, which is sold without land, is taxed at the general VAT rate of 20%, given that the turnover of this property is not considered the first transfer of the right to dispose of a newly built apartment, the turnover of which is prescribed taxation at a special tax rate of 10%. Therefore, the right to a VAT refund for the purchase of the first apartment from Article 56a of the Law cannot be exercised based on the purchase of a prefabricated house without land, considering that this asset is not considered an apartment in the sense of the aforementioned provision of the Law. However, if the buyer of the first apartment buys a residential building – a house, including a prefabricated house, with the associated land, which means that he is buying real estate, in that case, he is entitled to a VAT refund in accordance with the Law.”