"100,000 EUR" in the listing:
what is in the contract?
The difference between a price with VAT and a price without VAT is 20% on top. When a building is new, who charges the tax, and who chooses.
Twenty percent gets added on top.
The tax base is the price without the tax (Art. 26, para. 2 of the VAT Act), and the rate is 20% (Art. 66 of the VAT Act). It is charged by the seller registered under the VAT Act, not calculated by the buyer.
Unless the parties have explicitly agreed otherwise, "100,000 EUR" in a listing does not mean that is the amount you end up paying. Whether it is with or without VAT is decided by the contract.
One listed price, two readings.
If the listed sum of 100,000 EUR already includes the tax, the clean price of the property is 83,333.33 EUR, with 16,666.67 EUR of VAT sitting inside that sum.
If the same sum is listed without VAT, another 20% is due on top: a total of 120,000 EUR, of which 20,000 EUR is the tax.
VAT in the first case: €16,666.67. In the second: €20,000. VAT Act per lex.bg, current wording.
for up to 60 months.
The standard 20% rate applies to a building for which no more than 60 months have passed since the permit for use, or which is still at the "rough construction" stage (§ 1, item 5 of the Additional Provisions of the VAT Act).
Outside those bounds, a deal on a finished, older building is generally different: see the next section.
VAT is already inside every instalment.
On a taxable sale, the VAT is included in the advance payment, not charged separately afterwards (Art. 25, para. 7 of the VAT Act): of a 20,000 EUR advance, 3,333.33 EUR is VAT. The invoice is issued within 5 days of receiving the advance (Art. 113, para. 4).
A building that is not new under the definition above is exempt from VAT (Art. 45, para. 3 of the VAT Act). A registered seller may choose to tax it anyway (para. 7), but an individual buyer can neither request it nor stop it. For a home for personal use there is no right to a tax credit: the 20%, if the seller chooses it, is a final cost for the buyer.
Is your listing priced with VAT, or without?
We check the listed price and the offer before you sign a preliminary contract, for a new build or an older building.
Comments
No comments yet. Be the first.