In 2009, as an anti-crisis measure, the FYR Macedonian
government introduced the possibility to apply for the
preferential VAT rate of 5% on the first sale of residential
buildings. While initially planned to be in force until the end
of 2011, the application period has already been extended
twice: the first time in late 2011 whereby its validity was
prolonged until the end of 2015, and the second time in July
2015 when it was prolonged for three more years.
The third renewal was adopted in June 2018 and, with it, the
measure will continue to apply until the end of 2023.
By way of background, with this measure, the first sale of
residential buildings before they are first occupied and within
five years of their completion, is subject to the reduced VAT
rate of 5% (instead of the standard rate of 18% which was
applied before 2009). To be eligible for this reduced VAT rate,
the building must be used for residential purposes. In the case
of a mixed-purpose building, a proportional VAT application is
enforced – the portion of the building to be used for
residential purposes will be levied with 5% VAT while the rest
of the building will be levied with the standard 18% rate.
This further extension of the preferential VAT regime is
expected to provide yet another impetus for the booming
residential construction sector.
Elena Kostovska (email@example.com),
Tel: +389 2 2400225