Abstract

Since the date of purchase, within five years property sales become a source of income which brings the necessity to settle with the tax authority. In order to avoid paying tax one could use exemption and allow one’s revenue for residential purposes. One of those purposes could be renovation or building finish of a residential property. In practice, there have been some problems in regard to treating certain construction and renovation expenses as having premises for such an exemption. Debatable expenses are, e.g. fixed furniture, lighting, fence and household goods. In judicial practice, we can point out two conflicting approaches in regard to qualifying such expenses as being eligible for exemption. On 13 October 2021, the Minister of Finance, Development Funds and Regional Policy provided a general interpretation, in which he partially pointed out expenses having premises for exemption. However, a tax interpretation is not a source of law, therefore, it does not solve all current problems.