360Blog
There are exactly two taxes on buying property in Serbia, and the rule for which one applies is simple. Buyers (and sometimes agents) still get it wrong.
The rule
- VAT (10% on residential, 20% on commercial), applies to the first transfer after construction, when the seller is a VAT-registered investor.
- Transfer tax on absolute rights (2.5%), applies to every other transfer: resales, inheritance-then-sale, sales between individuals, etc.
Never both. The mere fact that VAT applied once in the chain is irrelevant for the next sale.
Who pays
For VAT the seller bills it as part of the price. For transfer tax, it is legally the seller's obligation, but the market convention in Serbia is that the buyer pays. Make sure the contract is explicit, "porez na prenos snosi kupac" is standard wording when that's the deal.
Why it matters
- First-apartment VAT refund applies only to the VAT track. If you buy a resale, there is no VAT on the invoice and no refund to claim, but there is also no VAT in your price to begin with.
- Transfer tax is charged on the market value, not the contract price. If the tax authority decides your contract price is below market, they will assess transfer tax on their higher number. Don't try to write a suspiciously low price.
- Filing deadlines differ. Transfer tax return: 30 days from contract. VAT refund: 30 days from final payment.
Edge cases
- Investor sells to another company, company sells to end buyer. First sale: VAT. Second: transfer tax. The end buyer can't claim the first-apartment refund because they didn't buy from the investor.
- Exchange of apartments. Counts as two sales for tax purposes. Both sides trigger transfer tax on their respective values.
- Gift between close relatives. Exempt from transfer tax but has its own inheritance and gift tax bracket (0% for first-degree relatives).
