Real estate VAT and complex transactions
VAT regimes on complex real estate transactions
Certain real estate transactions conducted by professionals, such as the restoration of historical monuments or classified buildings, may experience a complex tax regime at the time of resale due to a tangled web of various tax regimes that may come into play. The real estate VAT applicable to this type of real estate transaction can then appear complex to determine.
The multitude of real estate VAT regimes applicable to complex transactions
The inherent complexity of certain real estate transactions may arise from the fact that the company will sometimes have to take into account multiple real estate VAT regimes (VAT on new construction, VAT on buildings over 5 years old, different VAT rates…) by ventilating its real estate transaction based on, for example, the different nature of real estate, different construction years, or the type of work done on different parts of the property. This heterogeneity requires special attention to avoid errors in determining applicable VAT regimes and thus limit the risk of requalification by the tax authorities.
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VAT Real estate promotion
The real estate development activity involves producing real estate properties intended for sale. Real estate development primarily consists of the construction and sale of real estate properties. Also, the construction and sale of real estate properties are subject to the rules governing value-added tax: real estate VAT…
VAT Goods dealer
The business of a real estate dealer involves buying real estate properties, either in their name or through a company, and reselling them to make a profit.
In order to improve their margin, the real estate dealer may use various strategies, such as buying a building and then dividing it into lots for separate resale, or renovating real estate properties to increase their value before selling them…
VAT Construction-sale
The value-added tax (VAT) on construction-sales is the tax applicable to the construction of real estate properties with the intention of resale. The VAT rate applicable to this type of real estate transaction is usually the standard rate. However, it can vary depending on various factors such as the type of transaction and the profiles of the buyers…
VAT on business, professional and commercial real estate
Real estate held professionally by a company, whether for civil or commercial purposes, may be subject to real estate VAT.
Whether it’s a professional real estate purchase or the sale of professional real estate, intended for the company’s use or for rent, the company must pay special attention to the application of the VAT regime.
Thus, some real estate transactions may fall within the scope of VAT, while others may be outside the scope or exempt from VAT, with sometimes possible option mechanisms.
Real estate VAT and complex transactions
Certain real estate transactions conducted by professionals, such as the restoration of historic monuments or classified buildings, may be subject to a complex tax regime at the time of resale, given the entanglement of various tax regimes that may apply. The real estate VAT applicable to this type of real estate transaction can then appear complex to determine. The tax complexity inherent in certain real estate transactions may stem from the fact that the company will sometimes have to consider multiple real estate VAT regimes (VAT on new construction, VAT on buildings over 5 years old, different VAT rates, etc.) by ventilating its real estate transaction based on…