Transfer Tax on Absolute Rights
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An explanation of transfer tax on absolute rights when buying an apartment in Serbia — rate, tax base, who is liable, VAT, first home, and tax exemptions.
In short
Basic rules
Transfer tax on absolute rights is paid on transfer of ownership of real estate for consideration when the transaction is not subject to VAT and no tax exemption applies. It most often arises when buying resale property or buying from an individual.
Transfer tax or VAT
When buying an apartment it is important to distinguish transfer tax on absolute rights and VAT. If the property transaction is subject to VAT, transfer tax is not paid for the same transaction. When buying new construction from a developer check whether the price includes VAT, whether the buyer is entitled to VAT refund for a first home, and what exactly is stated in the contract and invoice.
Who pays and when
The seller, i.e. the transferor of rights, is legally liable for transfer tax on absolute rights. However, in practice the contract often provides that the buyer bears the tax cost. Therefore the sale contract should clearly state who pays the tax, within what deadline, and what happens if the buyer claims a tax exemption.
- Tax rate is 2.5% when the transaction is not subject to VAT
- The seller is legally liable, but the buyer may bear the cost if agreed
- The public notary submits the tax return ex officio for property transfers
- Tax is paid per decision of the competent tax authority within the prescribed deadline
- Seller's capital gains tax is a separate tax issue and is not the same as transfer tax
Tax base
Tax is most often calculated on the agreed sale price, but the tax authority may verify market value if it assesses that the agreed price is below market value. Therefore it is neither safe nor legal to artificially reduce the contract price to lower tax.
First home exemption
A first-home buyer may be entitled to tax exemption for the prescribed area if legal conditions are met. Conditions are checked against buyer status, apartment size, household members, and whether the buyer previously owned relevant property. Before signing the contract check full documentation required for exemption.
Other cases and special situations
Exchange, gift, inheritance, land purchase, purchase from a legal entity, purchase from a developer, and purchase of a first property may have different tax treatment. Do not apply the same rule to all — in each case check whether transfer tax, VAT, inheritance and gift tax, or tax exemption applies.
| Case | Tax treatment | Note |
|---|---|---|
| Standard resale purchase | Transfer tax 2.5% | Seller is legally liable, but cost is often agreed to be borne by buyer |
| First home buyer | Possible exemption | Applies only if legal conditions are met and up to prescribed area |
| Purchase from developer | Usually VAT if transaction is subject to VAT | If VAT is paid for that transaction, transfer tax is not paid for the same transaction |
| Building land purchase | Depends on seller and tax treatment | Check whether VAT or transfer tax applies |
| Gift or inheritance | Special tax regime | Do not treat the same as standard apartment sale |
Frequently asked questions
Real estate agency, Serbia
Related guides
- Costs of Buying an Apartment in SerbiaA complete overview of costs the buyer should plan when purchasing an apartment in Serbia — tax, VAT, notary, agency, bank, loan, mortgage, and additional expenses.
- Notary Costs When Selling an ApartmentAn overview of notary fees and contract certification costs when selling an apartment in Serbia — what the notary charges, who usually pays, and what additional costs to plan for.
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