A recent case clarifies how VAT applies to real estate (apartments, commercial spaces, parking spots) when full payment was made as an advance before the standard VAT rate changed.
In the analyzed example, advances were invoiced and collected at 19% VAT before 1 August 2025, but the handover and transfer of ownership will occur in February 2026, after the standard rate increased to 21%.
The key point is determining the VAT rate applicable at the time of actual delivery. According to Article 281(6) of the Fiscal Code, the delivery date is the moment the right to dispose of the property as an owner is transferred, regardless of when the advance was collected.
Furthermore, Article 291(6) of the Fiscal Code explicitly states that if an advance was collected before the rate change, a VAT adjustment must be made according to the rate in effect on the delivery date. Therefore, advances collected at 19% must be adjusted to 21%, in line with the current rate at the moment of transfer.
According to the definition of an advance (Article 282(2)(b)), partial or full payment made before delivery does not exempt the taxpayer from the obligation to adjust VAT. In practice, the VAT amount collected must be recalculated at 21%, even if full payment was made before the legislation changed.
Conclusion: For real estate deliveries initially invoiced at 19% but completed after the rate increase, the supplier must apply 21% VAT and perform the necessary adjustment. This ensures compliance with the Fiscal Code and prevents double taxation.