European Property Federation

TAXATION
issue	impact	status

Reduced Rates of VAT on Housing

¤ August 2007 ¤

Concerns housing renovation and repair.

Commission Communication.

VAT on Renovation and Repair of Private Dwellings (E)

Final List of Member States Allowed to Apply a Reduced Rate

¤ July 2006 ¤

14 member states out of 25, to varying degrees.

Valid until 31 December 2010.

Reduced Rates of VAT on Renovation and Repair of Housing (D)

¤ February 2006 ¤

Council agreement prolongs reduced rates for those member states that already have them and opens short window of opportunity for those that don’t.

See Secretariat analysis.

Reduced Rates of VAT on Housing (C)

¤ October 2005 ¤

Would extend option to all member states permanently.

Negotiation in Council.

Tax Depreciation of Immovable Assets

¤ February 2005 ¤

Affects balance sheet.

See EPF Secretariat report

VAT on Housing Services and on Rent (B)

¤ March 2004 ¤

Lower VAT rates.

Informal Commission document for debate in Council. Commission Proposal for a Directive of July 2003 still on the table.

Reduced Rates of VAT on Housing
(A)
¤ January 2004 ¤

See Commission Proposal below.

Option on renovation and repair extended to 31 December 2005. Supply, construction, alteration, maintenance, cleaning of housing as well as rental of housing pending.

European Parliament: Legislative Resolution on Proposal for a Directive Amending the 6th VAT Directive (III)

¤ December 2003 ¤

Supports reduced rates for private housing and for rent.

December 2003 Plenary.

European Parliament: Draft Opinion of Rapporteur Christa Randzio-Plath on Proposal for a Directive Amending the 6th VAT Directive (II)

¤ November 2003 ¤

Supports reduced rates for private housing and for rent.

Final vote in Plenary on 1 December 2003.

Proposal for a Directive Amending the 6th VAT Directive (I)

¤ July 2003 ¤

• Enables reduced VAT rates on supply, construction, renovation, alteration, repair, maintenance and cleaning of housing as well as on rental of housing.

• Lower taxes for owner-occupiers and private landlords. VAT on rent can lead to lower rent.

Under examination by Council of Ministers. Should be law by 31 December 2003.

Comparative Tables of Member State VAT Rates

¤ July 2003 ¤

Useful for interstate comparisons of property-relevant tax .

As at 1 May 2003.

6th VAT Directive

¤ May 2003 ¤

The basic VAT law.

Consolidated version.

Member State Reports on Reduced VAT Rates for Renovation and Repair of Housing

¤ May 2003 ¤

Supposed to influence Commission thinking.

Completed.

VAT on Labour-Intensive Services (including renovation and repair of housing and, separately, window and house cleaning)

¤ January 2000 ¤

Gives Member States the option of having a reduced rate of minimum 5%.

28 February 2000: Council Decision.

System operational on 1 January 2000 for three years, renewable if successful.

Commission to ask for one-year prorogation of current régime (to 1 January 2004).

Before 1 October 2002 each of the Member States applying the reduced rate must report to the Commission on the measure's effectiveness in terms of job creation. These reports could be good ammunition for persuading those countries that didn't take up the option in 2000 to do so in 2004.

Arthur Andersen Netherlands Study for The Commission on The Application of VAT and Other Indirect Taxes to The Property Sector

¤ June 1999 ¤

No help at all to cross-border property investors.

Will not lead to a proposal for harmonisation.

24 June 1999: EPF views on Arthur Andersen findings sent to Commission.

EPF view: no harmonisation required.