VAT on new flats in Poland to rise to 22%?

Is it true that VAT on new flats is currently 7% and will rise to 22% in 2008?

Oouch! - that's gonna hurt.

"For off plan properties the sale falls under the VAT category of Construction and Repair Services Relating to Housing. Until the end of 2007 VAT on new properties was paid at the reduced rate of 7% and remains so on residential properties smaller than one hundred and fifty square meters and single family houses less than three hundred square metres. For apartments or houses larger than this VAT is due at the standard rate of 22%. Be aware that not all developers include VAT on their price lists so always double check. Garage spaces, even when sold with a residential property, have a VAT rate of 22%."

From the book Buying Property in PolandIt also says VAT is 22% for commercial properties but no VAT on the secondary market.

Won't effect most people!

dont worry market will crash so be more realistic prices again

I do hope so

why would you wnt the market to crash?

Hi,
It's untrue that the VAT is increasing from 7% to 22% in 2008....
Polish Parliament agreed this on Oct 19th. Only residential exception is apartments over 150 sq m. For validation, you can see this also in Poland Monthly magazine November issue.

Over 120 sq mts, I think.............People will be less inclined to buy new builds.......great idea, as people will be more inclined to but old flats over 120sq mts which need refurbishment....hence beautifying neglected properties.

Exactly correct, this really is a storm in a teacup, 22% VAT has been suggested on apartments, it was originally supposed to come into affect in 2008 and guess what noting has changed. Considering 95% of the apartments sold in Poland are less than 90m2 I would'nt worry about that any way that is if the authoroties do finally decide to put this plan into action.

You only pay VAT on new builds, I think this 22% VAT on new build apartments was designed to combat foreign investors buying houses which had been passed off as apartments thus avoiding the problems associated with foreigners not being legally permitted to buy houses. Now that house prices have caught up with apartment prices there really is no need for this bill of legislation. If they do pass it developers will avoid building apartments over 120m2 like the plague.

The last I heard was that the 7% to 22% rise in VAT expected in Jan 2008 has been put on hold up to at least 2010.

I also believe this will only affect apartments bigger than 120m2 or houses above 300m2

We'll have to wait and see what transpires.