VAT refund for building materials - last 3 months under the old rules
The option to refund some of the VAT on the purchased building materials appeared on May 1, 2004, that is on the date of Poland's accession to the European Union. The rules we are used to, however, will change from January 2014. VAT refund for building materials will still be possible, but with limitations. For many people, less than 3 months are left to make purchases in order to exercise the right to recover part of the VAT.
The day of Poland's accession to the EU was significant for ordinary citizens in many respects. One of the reasons was to raise the VAT rate for the purchase of building materials from 7% to 22%. Hence, natural persons were offered the possibility of recovering part of the expenses approximately to the value in which they suffered a loss due to the increase in the tax rate. This reimbursement is financed from the state budget.
VAT refund for building materials - rules currently in force
In the current legal status, i.e. until December 31, 2013, natural persons may apply for reimbursement of part of the expenses incurred for the purchase of building materials in connection with:
- construction of a residential building,
- superstructure or extension of a building for residential purposes or reconstruction (adaptation) of a non-residential building, its part or a non-residential room for residential purposes,
- renovation of a residential building or a flat.
It is also necessary to have:
- the right to use the real estate for construction purposes or the legal title to a residential building or apartment in the event of renovation of a residential building or apartment,
- building permit in the case of an investment for which such a permit is required under the Construction Law.
This return is possible provided that you have invoices documenting the purchase, issued for natural persons. Here, it is important that the invoices for each item contain the goods registration mark (PKWiU). This will make it clear whether there is a right to recover part of the VAT on the items in question. You can apply for a refund for 5 years, starting from the submission of the first application (currently applications can be submitted once a year).
In addition to copies of invoices, legal titles or building permits, the tax office must submit a completed VZM-1 application with attachments (VZM-1A and / or VZM-1B and / or VZM-1C). These appendices include a list of invoices for which a natural person requests a refund of part of the VAT.
The list of construction works that are subject to VAT refund can be found in the appendix to the Act of August 29, 2005 on the reimbursement of certain related expenses to natural persons. with housing construction.
However, the tax refund does not cover all building materials, but only those for which a reduced VAT rate of 7% applied before May 1, 2004. The list of materials that may be returned from January 1, 2011 is included in the appendix to the notice of the Minister of Infrastructure of September 27, 2010. Examples of materials include: bricks, tiles, sand, pipes, steel, cement, concrete products, gas meters or heating furnaces. Importantly, the VAT refund applies only to construction materials, not the services provided (labor).
What will change from January 2014?
The introduced changes result from the Act on state aid in the purchase of the first apartment by young people passed on 27 September. In the explanation included in the draft act itself, it was indicated that the new solutions assumed the liquidation of the system of reimbursement to natural persons for part of expenses related to housing construction.
However, the possibility of obtaining a refund will not be completely eliminated. At the same time, legislators impose many restrictions that will irretrievably prevent many people from applying for reimbursement of expenses.
After January 1, 2014, only young people up to 36 years of age will be entitled to the relief. Importantly, in the case of spouses, the age limit will only apply to one of them. The condition for applying for reimbursement of some of the expenses incurred is to obtain a building permit only from 2014. However, these persons will not be able to be owners or co-owners of other real estate.Due to the limitation as to the possession of a building permit, people renovating apartments in the developer standard will not be able to apply for reimbursement of expenses.
Another limitation is the limit of the area of an investment building. The VAT refund will only apply to:
- houses - up to 100 m2,
- apartments - with a maximum area of 75 m2.
The exceptions are cases where the person applying for the reimbursement on the day of issuing the building permit has raised at least 3 children. Then the space limits are higher and amount to 110 m2 for houses and 85 m2 for apartments.
Interpretation of the term "acquired right"
In the justification to the draft act on state aid in the purchase of the first apartment by young people, it was also indicated that the current VAT refund system is to be operational by the end of 2013, and then it will be closed while preserving acquired rights.
The protection of acquired rights, however, applies only to the possibility of applying for the reimbursement of part of the expenses, from invoices issued by 31 December 2013. Thus, there are incomplete 3 months for the purchase of construction materials with the possibility of recovering a part of the incurred expenses. Later, the basic limitation will be the condition of having a building permit, issued in 2014, which will effectively prevent people who started construction in previous years from applying for a refund.