When it comes to VAT
To say that there have been significant developments in the RETT is an understatement. For example, the introduction of a special rate for residential properties (2%) in 2011 and the restrictions on the application of this rate in 2021, increases in the general rate from 6% to 8% in 2021 and a further increase to 10.4% in 2023 , introduction of the starters exemption in 2011 and the restrictions for the application of this exemption in 2021 and the introduction of the new 4% rate for real estate share transactions as of 2025 (link news item). These and other developments have led to an examination of the transfer tax in order to determine whether further research is necessary into the RETT tax regulations (link).
In the letter dated October 2, 2023 (link), the State Secretary of Finance announces that the aforementioned examination is the prelude to an evaluation of certain RETT regulations. This could include evaluating 20 exemptions, the reduced rate for residential properties and the rate differentiation.
The following schemes will be evaluated in 2024:
• RETT concurrence exemption and VAT (will be included in the evaluation of VAT exemptions 2024. See our news item about VAT exemptions)
• Exemptions for residential investment funds
• Exemption for neighbourhood development companies
• Starter exemption
• Exemption from repurchase under sales regulatory clause
• Rate differentiation
The evaluations will not directly lead to changes in the RETT, but the results will undoubtedly provide direction for policy. Abolition and/or adjustments of the relevant regulations cannot be ruled out as a result. We are particularly curious about the evaluation of the RETT concurrence exemption, partly due to the interest this RETT exemption has received this year already (news item real estate share transactions).
Another 14 exemptions will be evaluated in the years 2025-2027 (link page 31)
If you would like to know more about this evaluation, please do not hesitate to contact us.
If you have any questions about this topic or if you would like to discuss the topic further, please do not hesitate to contact us at info@vatpartners.com
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