Buying your first apartment usually starts with one question: how much does the property cost?
But when buying a new-build apartment in Serbia, another question can make a significant difference to your total budget:
How much of the VAT paid on the apartment can you get back?
A first-time buyer may qualify for a VAT refund, but the refund is not automatic and does not necessarily apply to the entire apartment.
Before signing the purchase agreement, it is therefore useful to understand three things: whether you qualify, how much floor area is eligible and what you need to submit to claim the refund.
What is the VAT refund for a first apartment?
The first transfer of newly built residential property is subject to VAT at the reduced rate of 10%. A buyer who meets the statutory requirements may claim a refund of the VAT attributable to the eligible area of the apartment.
This is different from the property transfer tax exemption that may apply when purchasing an existing property.
The two systems should not be confused.
Who qualifies?
The buyer must be an adult Serbian citizen with residence in Serbia and must be purchasing their first apartment.
In addition, from 1 July 2006 until the date on which the purchase agreement is certified, the buyer must not have owned, jointly owned or co-owned an apartment in Serbia.
This means that simply not owning an apartment today is not necessarily enough.
A previous ownership share in another apartment may affect eligibility.
Another important requirement concerns payment. The agreed purchase price including VAT must be paid in full to the seller's current account before the refund is claimed, subject to specific rules for certain transactions regulated by law.
How much floor area is eligible?
A first-time buyer may claim a VAT refund for up to 40 m² of the apartment.
The eligible area may be increased by up to 15 m² for each qualifying member of the buyer's household.
For example, if you buy a 60 m² apartment on your own and meet all the requirements, you may claim the VAT attributable to up to 40 m².
If you purchase the apartment as part of a household with a spouse who also meets the statutory requirements, the eligible area may increase by another 15 m², bringing the total to up to 55 m².
Who counts as a member of the household?
For these purposes, the law does not simply include every relative.
The household must involve shared living, income and expenditure, and the relevant family member must have the same registered residence as the buyer. The law includes categories such as spouses, children, adopted children and parents, subject to the prescribed conditions.
When claiming an additional 15 m² for a household member, additional evidence regarding family relationship, residence and previous property ownership is required.
Should you always use the additional allowance for family members?
Not necessarily.
This is an important detail that buyers sometimes overlook.
If a VAT refund has already been claimed for a household member as part of another buyer's first-home purchase, that person cannot later use the same first-home VAT refund when purchasing their own apartment.
Using a child or another household member to increase today's refund should therefore not be treated as an automatic decision.
The immediate saving should be weighed against that person's ability to use the benefit themselves in the future.
How much money can you actually get back?
There is no single fixed refund amount.
It depends on:
- the purchase price;
- the VAT charged;
- the size of the apartment;
- the floor area for which the buyer qualifies.
If the apartment is larger than the eligible area, the buyer does not receive a refund of all VAT charged on the property. The refund is limited to the amount attributable to the qualifying area.
What documents are required?
According to the Serbian Tax Administration's current service catalogue, a buyer claiming the refund only for themselves submits documents including:
- birth certificate;
- certificate of citizenship;
- proof of residence;
- certified copy of the apartment purchase agreement;
- fiscal receipt showing VAT;
- evidence that the full agreed purchase price including VAT has been paid to the seller's account;
- a certified declaration that the buyer is purchasing their first apartment, using the IKPS-PDV form.
The refund application itself is submitted using Form RFI.
If the refund also includes members of the buyer's household, additional documents proving the family relationship, common residence and the household members' eligibility are required.
Where is the application submitted?
The application is submitted to the competent organisational unit of the Serbian Tax Administration according to the seller's registered office or residence.
The Tax Administration currently allows the request to be submitted in person, by post or electronically to the relevant organisational unit.
How long does the refund take?
According to the Tax Administration's service catalogue, the competent tax authority issues its decision within 30 days of receiving the application, following verification of the relevant conditions.
The refund is then made within 15 days from delivery of the decision.
This assumes that the application is complete and that all required evidence has been provided.
VAT refund or property transfer tax exemption?
These are two separate tax mechanisms.
If you are buying a property in its first taxable transfer where VAT is charged, you may be dealing with a VAT refund.
If you are buying a property subject to property transfer tax, a different first-home tax exemption may apply.
So the relevant question is not simply:
“Is this my first apartment?”
You also need to establish:
“Which tax regime applies to the property I am buying?”
That determines which benefit may be available.
The most common mistake is checking too late
Buyers sometimes agree on the apartment, sign the documentation and make the payments before examining the VAT refund requirements in detail.
It is much safer to deal with these questions earlier.
Before completing the purchase, check:
- whether you previously owned or co-owned an apartment;
- which household members, if any, you intend to include;
- how that may affect their future rights;
- whether the contract and payment structure satisfy the requirements;
- whether you have all necessary evidence and documentation.
In a property purchase, details like these can easily represent several thousand euros.
Conclusion
A VAT refund can materially reduce the effective cost of buying your first new-build apartment in Serbia, but eligibility does not arise merely because this is your first purchase.
Your previous ownership, payment method, apartment size and any household members included in the claim all matter.
The buyer may claim a refund for up to 40 m², with an additional eligible area for qualifying household members.
The best time to verify all of this is before the purchase agreement is certified, while the transaction can still be structured correctly.
At Urbani Agent, the aim is not simply to help you find the right apartment. It is to make sure you understand what you are buying, what the transaction will actually cost and what needs to happen before you receive the keys.
Note: This article is for informational purposes only. Tax treatment and eligibility depend on the circumstances of each transaction, so the current requirements should be verified for the specific buyer and property before completing the purchase.
