Tax on absolute rights

📌 BASIC INFORMATION

• Taxpayer:
  Individual or legal entity transferring or acquiring property ownership rights.
• Taxable subject:
  Transfer of property ownership, as well as usage rights, long-term leases, building rights, etc.
• Tax base:
  Market value of the property at the time of contract conclusion (as assessed by the Tax Administration, which may differ from the agreed price).

💸 TAX RATE

• 2.5% - of the property's market value.
• In case of transfer based on a gift contract, a different rate may apply (depending on kinship).

🏠 TAX PAYMENT EXEMPTIONS

No tax on transfer of absolute rights in the following cases:

1. Purchase of first property (first home) - under conditions:
   • The buyer is an individual purchasing an apartment or house for the first time to solve housing needs.
   • Area does not exceed certain limits (up to 40 m² for the buyer plus 15 m² per household member).
2. Transfer between close relatives (in some gift cases).
3. When transaction occurs between VAT subjects and VAT is calculated (e.g. for new apartments).

📄 DOCUMENTATION AND PROCEDURE

1. Notarization of sales contract by a public notary.
2. Public notary submits tax application for absolute rights transfer tax to the Tax Administration (form PPI-4).
3. Tax Administration issues tax assessment decision and delivers it to the buyer.
4. Tax payment deadline: 15 days from receiving the decision.
5. Payment is made to the appropriate account of the local self-government unit (municipality where the property is located).

⚖️ LEGAL REGULATIONS

• Property Tax Law (Official Gazette of RS, no. 26/2001... and others)
• Real Estate Transaction Law
• Regulation on Determining Tax on Transfer of Absolute Rights

🔍 ADDITIONAL NOTES

• If the buyer fails to pay the tax, property registration in the Cadastre may be prevented.
• Default interest is calculated in case of late payment.
• Expert appraisal can be requested if you disagree with the assessed market value.