# Mistakes that can cost you your first-home VAT refund

> A VAT refund can significantly reduce the cost of buying your first home. However, incorrect assumptions and incomplete documents may jeopardise your eligibility.

- Web page: https://urbaniagent.rs/en/blog/mistakes-that-can-cost-you-your-first-home-vat-refund
- Language: English
- Other language: https://urbaniagent.rs/blog/greske-zbog-kojih-mozete-izgubiti-pravo-na-povrat-pdv-a-za-prvi-stan.md
- Updated: 2026-08-13

- Published on: 2026-08-04
- Author: Urbani Agent
- Categories: Market and Investments, Buying Property
- Tags: VAT refund, first home, buying a new build

A VAT refund when purchasing a first home can provide significant financial relief.

However, buyers often begin checking the detailed eligibility requirements only after reserving the property or signing the agreement.

They may then discover that they previously owned a share in another apartment, that the transaction does not include VAT at all, or that the payment structure and documentation do not meet the refund requirements.

Eligibility should therefore be reviewed **before making a final purchasing decision**.

## Mistake 1: The buyer previously owned an apartment or a share in one

A common misconception is that a buyer remains eligible as long as they have never owned an entire apartment.

However, co-ownership or even a partial ownership share may also affect eligibility.

To qualify, the buyer must not have owned or co-owned an apartment in Serbia from **1 July 2006 until the date on which the purchase agreement is certified**.

This may be relevant where the buyer:

- inherited part of a family apartment;
- received an ownership share as a gift;
- was registered as a co-owner with parents or a spouse;
- previously benefited from a first-home tax relief.

Buyers should not rely solely on whether they currently live in their own home or whether they consider themselves to have previously “owned a property”.

Their legal and tax status should be reviewed before proceeding with the purchase.

## Mistake 2: The property looks new, but the transaction is not subject to VAT

It is not enough for an apartment to be new, modern or located in a recently constructed building.

The purchase price must include VAT that has been charged by the seller. In practice, the refund concerns the first transfer of a newly constructed apartment by a seller registered for VAT, provided that all other legal conditions are met.

If the apartment is purchased from an individual who previously bought it from the developer, the transaction will generally no longer be the first transfer.

VAT is therefore normally not included in that resale price, meaning there is no VAT to refund.

A first-time buyer may instead be eligible for relief from the property transfer tax, but this is a **different tax benefit with a separate procedure**.

## Mistake 3: Expecting a refund for the apartment’s full area

The refund is subject to a surface-area limit.

A first-time buyer may claim the refund for up to **40 m²**. An additional **15 m²** may be available for each qualifying member of the buyer’s household, provided that the member also meets the statutory conditions.

Where the apartment is larger, the refund is not automatically calculated for the entire property, but only for the qualifying area.

A household member whose additional allowance has been used may also lose the ability to claim the same first-home benefit later.

Household members should therefore not be added to the claim automatically without considering the longer-term consequences.

## Mistake 4: A household member does not meet the conditions

Being related to the buyer is not enough by itself.

For the additional allowance, the person must fall within the legally defined household, share the buyer’s registered residence and satisfy the ownership requirements for the relevant period.

Problems may arise where:

- spouses have different registered addresses;
- a household member owns or previously owned a share in an apartment;
- a tax benefit was previously claimed for that person;
- the required household conditions cannot be documented.

Each household member should therefore be assessed separately before the expected refund is calculated.

## Mistake 5: The price is not paid in the required manner

One legal condition is that the agreed purchase price, including VAT, must be paid in full to the seller’s bank account, subject to specific rules for mortgaged properties and certain other transactions.

The payment method should therefore not be agreed informally.

The contract, payment instructions, proof of payment and seller’s documentation must all be consistent.

The buyer should know in advance:

- which account the money must be paid into;
- who the formal seller and VAT taxpayer are;
- whether an appropriate fiscal receipt showing VAT will be issued;
- how full payment will be documented.

## Mistake 6: Preparing the documents only after the purchase

The refund is not granted automatically when the agreement is signed.

The buyer must submit an application to the competent Tax Administration office together with the prescribed documents, including the buyer’s declaration, citizenship and residence evidence, a certified copy of the agreement, the fiscal receipt showing VAT, proof of payment and relevant tax records.

Additional evidence is required when the refund also includes members of the buyer’s household.

The required documentation should be checked before signing the agreement, rather than only when the claim is ready to be submitted.

## What should be checked before reserving the property?

Before paying a reservation fee or deposit, confirm:

- whether the transaction is the first transfer and includes VAT;
- who the formal seller is;
- whether you have owned or co-owned an apartment since 1 July 2006;
- the surface area for which you may claim a refund;
- whether household members meet the conditions;
- how the purchase price will be paid;
- which documents the seller will provide;
- which documents you need to obtain yourself.

Serbia’s public real estate cadastre provides access to registered rights over individual properties, although the VAT refund procedure also relies on information from other official records.

Complex situations involving inherited shares, previously used tax relief, different registered addresses or unusual transaction structures should be reviewed by a lawyer or tax adviser.

## Check your eligibility before entering the purchase

The greatest mistake is not failing to know every tax rule.

The real problem is treating the refund as a guaranteed part of the purchasing budget and checking the conditions only after the transaction has already been agreed.

**Do not assume that you will receive a VAT refund. Include it in your calculation only after confirming that every condition is satisfied.**

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