In real estate transformation, parties must consider turnover tax and/or transfer tax. The optimal choice depends on various factors such as ownership status of the property, purpose of transformation, and the extent of renovations. The general transfer tax rate is 10.4%, but can be as low as 2% or even 0%. The sales tax rate is 21%. The main rule is that transfer tax is required when purchasing real estate, with exceptions for delivery of a building site or new real estate. The preference for either tax depends on whether the property is being transformed for sale, rent, or self-occupancy. For rental or self-occupancy, transfer tax is preferred, while for office buildings, VAT may be preferable if tenants can deduct it.
Source Taxence
