Has anyone managed to organise an early drawdown to avoid paying additional VAT in the Czech Republic?

I thought I had everything in place to drawdown almost 10million CZK for my unit at Central Park before the end of Dec 07 deadline. The early drawdown was designed to save me paying an additional 14% in VAT - that is an extra £38,000 at the current exchange rate!

However the arrangement failed at the last minute. Apparently Raiffeisenbank would not accept the documentation drafted by the developer. The developer was late in making the appropriate amendments and also made some errors in the drafting (or at least that is how I have understood the problem).

The deadline is now about to pass and I am resigned to funding a bill of £35-£40,000 depending on the exchange rate at completion.

I would be interested to hear how other people got on.

I also have an appartment in the Central Park development but didnt see it like that. The latest article on this subject was from the 5th December and i gather that rate rise is to increase to 9% from 1st Jan 2008 which will remain until 2010, so CP completion date would have to slip a long way before the 19% was imposed, currently due for 3rd Q 2008.
I hope i havent misunderstood this situation as im looking to proceed with the finance side in the first couple of months 2008, early drawdowns would only add to the overhead if the completion date slips anyway.

My Email to the Czech lawyers 4 weeks ago on this remains unanswered.

If you read the FinanceWatch blog on Czech VAT it says:

So, after much confusion, rumour and changes of plan, the situation is now this:

VAT on new builds in Czech will rise to 9% from January 1, 2008. 9% will also apply to renovation works on existing buildings. The 9% rate will only apply to properties in the category of ‘social housing’.
Social housing is defined as:

1) Family houses with floor space up to 350 sqm (floor space of all rooms) 2) Flats with a floor space up to 120 sqm

It appears too that developers will be able to take advantage of this lower 9% rate only if the block they are building only contains flats below the 120 sqm threshold.

The basic VAT rate of 19% will be applied to new houses or flats over the 350/120 sqm threshold.

Central Park has many units (including mine) of >120sqm therefore, as I understand it, the 19% rate will apply

Nick

Hi Nick

I queried this and had it confirmed by PS & a lawyer that the 19% vat only applies to the individual flats that are over 120sqm & NOT to the whole block if some flats within the block are > 120 sqm.

This is unfortunate in your case, but it means IMalik is at the vat 9% level. The 120 sqm is calculated on internal size only ignoring any balcony or outside space.

Hope that helps
Antony

Thanks Antony. If that is the case then maybe there is hope for me.

My unit is 124sqm. I wonder if I can sacrifice 4sqm of internal space. It'll cost me the best part of £10k/sqm to keep it so worth a thought isnt it?

Anyone else got any ideas on this front?