Bosnia and Herzegovina waiting for application of law on VAT refund on first real estate - How long will the procedure last and is the adoption of the rulebook imminent?

As mentioned before, this procedure can last for months. In which stage is the complete process, the eKapija portal tried to find out at the Indirect Taxation Authority. As we have been confirmed, a preliminary draft of the Regulation on the implementation of the VAT law relating to the purchase of the first real estate has been prepared, while the session of the ITA Board of Directors is awaited for further steps.

- The next steps in connection with the above are obtaining consent from the Management Board of the ITA for the implementation of public consultations and opinions from competent authorities, which is expected at the next session of the ITA Board of Directors. More details about what is stated in the aforementioned Draft Regulation will be possible to submit after it has been discussed at the next session of the ITA Board of Directors - they said from the Communications Department of the ITA.

The Management Board of the ITA confirmed to us that at the last session, on April 14, they considered the aforementioned regulation in the form of a draft. After discussion and certain objections, it was decided that the ITA of BiH should refine the proposed text of the regulation.

According to the law adopted, the buyer is entitled to a VAT refund for 40 square meters, and for each member of the household, a VAT refund for 15 square meters is provided.

In the first version of the law, VAT refund was possible only for the first apartment, but the amendments made it possible to buy a house.

As for the regulation itself, i.e. by-laws to be adopted by the ITA Board, they should determine the condition and method under which the buyer obtains the right to a VAT refund for the purchase of the first real estate, including the competent authorities for issuing certificates proving compliance with the conditions for VAT refund. In addition, that by-law should define the minimum period for alienation of real estate by the beneficiary of the right to VAT refund, then the area of ​​the object and the price of the object for which it is possible to obtain a VAT refund, the maximum amount of VAT refund and the number of household members who do or do not exercise the right and in what extent. It is necessary to define the initial terms in the sense of owning the first real estate in order to exercise the right, as well as other conditions required for the implementation of the VAT Law.

- Namely, in Republika Srpska the Geodetic Administration has records for real estate in the entire entity while in the Federation of Bosnia and Herzegovina this is not the case and those data are distributed by cantonal services - the ITA pointed out earlier.

- The deadline given by the legislator to the ITA to prepare by-laws is expiring these days, that is, the regulations that will regulate the procedures, conditions and method of return in more detail. For instance, it remains unclear how members of the same household will be treated, what will be the maximum amount to which the refund will be made or the maximum number of squares, what if someone has an inherited property that may not be contingent on life, somewhere in the countryside, will he be unable to exercise this right, will it be looked at whether he currently does not have or has never owned real estate and many more questions - Milanović says for eKapija.

According to Milanović, the situation on the real estate market in Banja Luka is stable, which is expected in the coming period as well. He believes that we should not expect a drop in prices, nor an excessive increase, if we consider supply - demand and economic parameters.

- Prices are stable with a slight increase as a result of inflation, the price of materials, the quality of construction, but without large oscillations, as was the case in, say, 2022. Demand as the main market generator is at a satisfactory level. There are occasional drops or increases in demand during the year but cumulatively on an annual basis it is satisfactory. Confirmation for this is a large number of investments, that is, a lot of residential and commercial buildings are being built, and the offer and construction are always adjusted to the demand - Milanović told us.