Extension of period for real estate transfer tax in the event of resale
Publication date 06 September 2012
In anticipation of amended legislation to be introduced in the 2013 Tax Plan, and in order to give a boost to the stagnating real estate market, the Ministry of Finance has issued a decree giving an approval and concession to extending to 36 months the six-month period for real estate transfer tax in the event of resale.
This extension only applies to real estate, residential or non-residential, purchased from September 1, 2012 onward. During a 36-month period following the purchase, the amount on which real estate transfer tax or VAT is owed ? whereby the VAT cannot be deducted as input VAT ? may, on resale of that real estate, be deducted from the real estate transfer tax base. A six-month period applies to real estate purchased before September 1, 2012.
This measure could act as an incentive, now that the real estate transfer tax base can be deducted over a much longer period when the real estate is resold. Although not included in the decree, the accompanying press release does state that the 36-month period applies to all real estate purchased before January 1, 2015.