Bosnia and Herzegovina has published new rules governing VAT refunds for first-time home buyers. The regulation, published in June 2026, sets out eligibility criteria, refund calculations, documentation requirements, application deadlines, and conditions that applicants must meet to receive the refund.
Bosnia and Herzegovina has adopted a regulation establishing the procedures for VAT refunds on the first supply of residential property for eligible first-time home buyers. The rules apply to purchases of newly built residential properties subject to VAT and define who can claim the refund, how it is calculated, and the obligations applicants must meet before and after receiving it.
Eligibility Criteria
To qualify for a VAT refund, an applicant must be an adult citizen of Bosnia and Herzegovina with permanent residence in the country. The refund is available only for the purchase of a first apartment, which may be a newly built individual house or a residential unit in a collective residential building located in Bosnia and Herzegovina.
The purchase must be subject to VAT, and the applicant must be acquiring the property as their first residential property under the conditions set out in the regulation.
Definition of first apartment and family household
The regulation defines a “first apartment” as a residential property that the buyer is acquiring for the first time or one that neither the buyer nor the buyer has owned, either wholly or partially, during the previous seven years.
For the purpose of calculating the refund, a family household includes the buyer’s spouse, children, parents, siblings, and the spouse’s children or adopted children, provided they share the same permanent residence as the buyer.
VAT refund calculation
The VAT refund applies to a maximum residential area of 40 square metres for the buyer, with an additional 15 square metres allowed for each qualifying member of the buyer’s family household.
Where the purchased property exceeds the eligible surface area, the refund is calculated proportionally based on the permitted area.
The maximum property value eligible for a refund is determined using the average quarterly apartment price published by the Agency for Statistics of Bosnia and Herzegovina. The maximum refund amount is calculated by applying a rate of 14.5299% to the value of 55 square metres at that average price.
Mandatory conditions
Applicants must satisfy several conditions before receiving the refund.
Neither the buyer nor any household members included in the claim may have owned residential property in Bosnia and Herzegovina during the previous seven years.
In addition, the seller must have reported and paid the VAT on the property to the Indirect Taxation Authority (ITA/UIO). The buyer must also pay the full purchase price, including VAT, by bank transfer before submitting the refund application.
Required documentation
Applicants must submit official application forms ZKPS and IKPS, together with supporting documentation.
Required documents include proof of identity, citizenship, residence, and, where applicable, birth or marriage certificates. Property-related documents include a notarised sales contract, the seller’s VAT invoice, and proof that the full purchase price has been paid.
Applicants must also provide certificates issued by the relevant tax and property registry authorities confirming that they have not owned residential property during the previous seven years.
Deadlines and post-refund obligations
Applications must generally be submitted by 30 June of the year following the property purchase.
The Indirect Taxation Authority will issue a decision within six months after receiving a complete application.
The regulation also introduces a five-year holding period. If the property is sold within five years of the refund approval, the recipient must repay the entire VAT refund together with interest.
The regulation further states that the right to a VAT refund is personal and cannot be transferred or inherited.
