VAT deductibility in the leasing of residential properties
We inform you that on 12 August 2005 with Resolution no. 119 / E (the "Resolution"), the Revenue Agency has expressed an opinion concerning the exact application of art. 19bis1, lett. i) of Presidential Decree 633/72, regarding the deductibility of VAT on the purchase of residential properties.
With this Resolution, the Revenue Agency considered, in a totally innovative way, that a leasing company that carries out a mainly or exclusively real estate activity, which purchases housing units by leasing them to its customers can deduct, like the companies that carry out exclusively or mainly real estate sales, VAT on the purchase of such assets.
This circular is intended to provide clarifications regarding the Resolution, which will have positive repercussions on the financing of the purchase and sale of residential properties.
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