Serbian Ministry Of Finance Offers Tax Relief For Real Estate Reinvestment

• Published date: 25 March 2024
• Subject Matter: Real Estate and Construction, Tax, Real Estate, Income Tax, Capital Gains Tax, Tax Authorities
• Law Firm: Eurofast
• Author: Aleksandar Maljkovic

The Serbian Ministry of Finance has issued a recent official opinion that holds potential advantages for individuals interested in reinvesting the proceeds from the sale of real estate. This positive development provides the opportunity to be exempt from paying capital gains tax when selling a property, if the funds are used to acquire another property for one's own housing needs or those of their family.

Conditions for Tax Relief

While the tax relief is not automatic, it offers a viable option for taxpayers under certain conditions.

To qualify for this exemption, individuals in Serbia must obtain an official decision from the relevant tax authority. It's important to note that this relief exclusively applies to capital gains resulting from the sale of real estate and does not extend to gains from other financial transactions, such as selling shares in a company.

Submission of Tax Return

To initiate the process, taxpayers are required to submit a tax return using Form PPDG-3R, accompanied by documentation that substantiates the resolution of their housing matter. The tax exemption is conditional and necessitates a thorough understanding of the specifics outlined by the Law on Personal Income Tax.

Exclusions from Tax Exemption

Crucially, the Law on Personal Income Tax does not grant the right to tax exemption if the funds obtained from real estate sales are directed towards the...