2026 guide to the reduced 5.5% VAT rate for buying a new home as a primary residence: conditions, income ceilings, price caps, resale and PSLA.
For new homes, VAT is generally charged at the standard rate (20%). For certain social-accession developments, reduced 5.5% VAT may apply, significantly reducing the total amount to finance.
The 5.5% VAT rate mainly applies to the purchase of a new home (often under VEFA) in designated areas (urban policy / urban renewal), provided that the home becomes the buyer's primary residence and the household meets income caps and price caps.
2026 guide to the reduced 5.5% VAT rate for buying a new home as a primary residence: conditions, income ceilings, price caps, resale and PSLA. Then check the eligibility conditions, the total cost, the holding horizon and the contractual documents specific to your project.
Use this guide to compare the criteria that genuinely affect your decision, then check the official references and conditions that apply to your situation before making a commitment.
The information in this article is linked to public references that help verify the applicable conditions and procedures.
