Real estate development & 37d VAT Act
The Supreme Court ruled that the transfer of a newly developed property two weeks after the start of the lease constitutes a transaction for VAT, and does not qualify as a transfer of a generality of goods (Article 37d). Important elements in the present case are that the (i) developer has not used the property in his business and (ii) the property has not been developed for his own exploitation. The developer intended to sell the property from the outset.
The transfer of a generality of goods is not subject to VAT. In many cases, real estate in let can be regarded as a generality of goods. The relevance of this lies in particular in exempt use and the VAT revision rules. Project developers who sell (and do not exploit) new self-developed real estate in a rented state, must take into account that VAT may be due.