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Transition law VAT increase does not apply to exercise right of sale option for new homes

  • A project developer and a foundation entered into a purchase guarantee agreement for new-build homes in December 2010.
  • The foundation guaranteed to purchase any unsold new-build homes at a set price.
  • In September 2013, the project developer sent an advance invoice to the foundation.
  • The purchase agreement of November 15, 2013, determined which homes would be delivered to the foundation in 2014.
  • The project developer believed that the transitional law regarding the VAT rate increase from 19% to 21% applied.
  • The Supreme Court ruled that the transitional law regarding the VAT rate increase did not apply to the purchase guarantee agreement.
  • The transitional law only applies to agreements that specifically aim to deliver a home, not agreements that only establish the right to exercise a sales option for one or more homes at a later date.
  • The general VAT rate was increased from 19% to 21% on October 1, 2012.
  • One of the transitional arrangements related to homes that a project developer would deliver after September 30, 2012, according to an agreement made before April 28, 2012, where the purchase price was paid in installments.
  • The old VAT rate of 19% still applied to the installments of that agreement that would expire before October 1, 2013.


Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.


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