The Tax Reform and its simplification established significant changes to the Value Added Tax ("VAT") on real estate sales.

Although the tax code has been included in the application of VAT to the sale of real estate, this tax only applied to the alienations made by construction companies with respect to a real estate built by it or partly by a third party for it.

Situation of real estate contracts

The promise of sales of real estate owned by a construction company of its turnover was assimilated to sales so that the advances paid by promise were affected with VAT.

For its part, the seller should not issue tax document when receiving such advances. In practice, this constitutes a deferral since VAT will be paid at the time of sale.

In fact, sales of new buildings with a construction permit with respect to the sale or other domain transfers, including the lease with a purchase option, also exempt from the VAT.

This exemption does mean that real estate must be new. The application for final receipt of the work has been submitted to the Municipal Works Directorate.