As a temporary crisis measure effective from October 1, 2010, the reduced VAT rate covers the labor component of renovation of or repairs to residential property older than two years from the date of first use. This measure will end as per July 1, 2011.
Deputy Minister of Finance Mr. Weekers has published a decree containing a transitional measure: renovations and repairs started before July 1, 2011, and concluded before October 1, 2011, are still eligible for the reduced VAT rate.
The Ministry of Finance's website explains that the contractor's administration must show that the work actually started before July 1, 2011. The contractor’s work records may be used to show that this is the case. This means that the reduced rate will not apply if there is no more than an agreement to carry out the work.
The conversion or renovation is considered to have been concluded if formal completion has taken place and the customer has accepted the work carried out. The fact that the customer has paid for the work carried out also constitutes evidence of acceptance.