Real estate sellers are unjustifiably demanding compensation for VAT.

The Consumer Rights Protection Center (PTAC) has received consumer complaints about the behavior of real estate (mostly apartment) developers and sellers, demanding payment of real estate tax compensation. Namely, when purchase contracts are included in and applied against consumers in practice, contract provisions not negotiated by the parties, which provide for the consumer’s obligation to pay real estate tax compensation, starting the day after the registration of property rights in the Land Registry, informs PTAC. Therefore, the obligation of the consumer to compensate the real estate tax paid to the real estate seller for the current tax year is included in the non-negotiated terms of the contract, where one of the parties is the consumer (the economically and legally weaker party), is recognized as contrary to the principle of legal equality of the contracting parties. Namely, such a provision of the contract creates a significant inconsistency in the rights and obligations of the contracting parties stipulated in the contract to the detriment of the consumer, especially considering the fact that in practice these provisions are not highlighted in the contracts, they are included in the section of the general contract provisions of the contract and they do not show a specific amount. Thus, important information is hidden and concealed from the consumer, which unjustifiably increases the total cost of real estate purchase, according to PTAC. According to the law, the payments imposed on a legal entity are normal costs of economic activity, which the economic activity performer himself must take into account when determining the price of his product or service, in this case, real estate. At the same time, PTAC draws attention to the fact that the amount of the tax rate differs for legal entities and natural persons, moreover, the amount of the tax rate also depends on the subjective rights possessed by each person, which gives the right to various types of tax benefits. Taking into account the above, PTAC concludes that the provision of the real estate purchase agreement, which stipulates the consumer’s obligation to pay real estate tax compensation for all or part of the current tax year, can be recognized as an unfair contract provision in accordance with Article 6, Part Three, 1 of the Consumer Rights Protection Law and Article 5, paragraph 5. Therefore, the terms of this type of contract are recognized as unfair and invalid from the moment of conclusion of the contract. Therefore, the seller of real estate has no right to retain or demand from the consumer real estate tax compensation for all or part of the current tax year as a separate payment from the purchase price of the real estate. PTAC warns and calls on real estate (especially apartment) dealers, developers and other involved persons to observe the above and not to include in real estate purchase contracts and not to apply in practice to consumers a provision that stipulates the consumer’s obligation to pay real estate tax compensation for all or part of the current tax year . See the full version of the article here!