Rulebook finally published: How to get a VAT refund for your first property in BiH
Below, we provide a detailed analysis of the new Rulebook, aiming to seamlessly guide you through all legally mandated formalities to claim your right.
The real estate market in Bosnia and Herzegovina is experiencing one of the most significant regulatory milestones in its recent history. Following months of intense anticipation, expert debates, and administrative coordination, the long-awaited Rulebook on the Procedure for Exercising the Right to a VAT Refund on the Purchase of a First Property has been officially published.
This bylaws act, whose entry into force on July 8., 2026, marks a turning point for thousands of citizens, finally establishes an operational legal framework that transforms solving the housing issue from a financial burden into a state-supported investment.
For investors, real estate agencies, and primarily buyers, this document brings long-sought legal certainty and clear guidelines.
Below, we provide a detailed practical analysis of the new Rulebook, aiming to seamlessly guide you through all legally mandated formalities to claim your right.
Who is eligible for a VAT refund?
The right to a VAT refund is granted to any adult natural person who:
is a citizen of Bosnia and Herzegovina; has a registered permanent residence in Bosnia and Herzegovina; is purchasing their first property; has not been an owner, co-owner, or joint owner of an apartment, house, flat, or other property intended for housing or renting in the territory of Bosnia and Herzegovina within the last seven years; is purchasing a newly constructed property on which VAT has been calculated.
Important note: This right applies exclusively to the purchase of newly constructed properties (new builds), given that old builds are not subject to VAT but rather to the real estate transfer tax.
How much of a refund can be achieved?
The right to a refund is granted for an area up to for the buyer of their first property.
If the buyer wishes to exercise this right for members of their family household as well, the eligible area increases by an additional for each household member who meets the prescribed conditions.
In practice, this measure results in a significant capital refund of tens of thousands of Convertible Marks (KM), with the final refund amount directly depending on the total living area and the agreed purchase price of the property.
The maximum refund that can be achieved at any given moment will be calculated by applying the converted VAT rate of to the amount obtained by multiplying the average price of an apartment including VAT in Bosnia and Herzegovina (published in the latest quarterly report of the Agency for Statistics of Bosnia and Herzegovina relative to the contract signing date) by . For an apartment purchased today, the maximum refund amounts to:
How to exercise this right?
The procedure is initiated by submitting an application to the competent organizational unit of the Indirect Taxation Authority of BiH (ITA).
However, before submitting the application, certain conditions must be met:
the purchase price must be paid in full; the seller must have properly reported and paid the VAT; the property must be recorded in official public registries; extensive documentation must be gathered to prove fulfillment of all legal requirements.
The Rulebook requires the submission of as many as 13 different documents, including vital statistics certificates (birth/marriage certificates), citizenship and residence certificates, tax authority confirmations, clearances from property-legal affairs authorities, proof of payment of the purchase price, buyer statements, and other evidence.
When can the application be submitted?
The application is submitted to the competent organizational unit of the ITA according to the seller's registered seat, using Form ZKPS - Buyer's Request for a VAT Refund on the First Apartment.
The buyer can submit the application only after the seller has calculated and paid the VAT to the ITA Single Account, and after the total purchase price including VAT has been paid in full.
The application must be submitted no later than June 30 of the following year for apartments whose sale was recorded in the previous calendar year.
The Rulebook also provides a transitional period for citizens who purchased an apartment after the amendments to the VAT Law entered into force, but before this Rulebook took effect. They will be able to submit their application within six months from the day the Rulebook enters into force.
The ITA is required to issue a decision within six months from the day a complete and orderly application is submitted.
Strict 5-year ban on property alienation and rental
To prevent speculative activities, quick resale, or commercialization of properties purchased under these conditions, the Rulebook introduces a rigorous control mechanism. A buyer who exercises the right to a VAT refund is strictly prohibited from selling, gifting, or renting out the property in question for a period of five years from the date of acquiring ownership.
If the buyer violates this ban, or if competent authorities subsequently determine that inaccurate data was submitted during the process, forced collection proceedings will be initiated. In that case, the buyer is required to return the refunded VAT amount in full, increased by legal default interest.
All details outlined in this article are aligned with the official bylaws of the Indirect Taxation Authority. The original document and all legal provisions are available directly via the Official Gazette platform:
https://bhas.gov.ba/data/Publikacije/Saopstenja/2026/CON_05_2026_Q1_1_BS.pdf
Ena-Lemana S.