Reduced 5% VAT on New Dwellings: Key Updates, Deadlines, and Transitional Provisions

• The reduced VAT rate (5%) applies to the supply or construction of a new dwelling used as a main and permanent residence, with recent amendments effective from 16 June 2023 and 24 April 2026.
• Transitional provisions allow applicants to benefit from the reduced VAT rate on the first 200 m² if a town planning permit was obtained or applied for by 31 October 2023, and the VAT application is submitted by 15 June 2026.
• The Tax Commissioner may examine qualifying applications until 31 December 2026 if delays are due to town planning authorities.
• Applications submitted between 16 June 2026 and 31 December 2026 are accepted if the town planning permit was obtained/applied for by 31 October 2023 and the building permit was issued after 1 January 2025 or not issued by 31 December 2026.
• All applications must be submitted via the Tax For All (TFA) portal, and applicants must ensure they meet the transitional requirements.

Source: kpmg.com

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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