In the previous article, we looked at the house of cards that item 2.42 can build when the tax treatment depends on a future intention. Today we turn to the moment when that house tends to fall: the assignment of the contractual position.
The scenario is a common one. A buyer signs a promissory contract (CPCV) for a property under construction, intended as a permanent primary residence. On the strength of that intention, the entire upstream operation benefited from the reduced 6% VAT rate under item 2.42. Then, before completion, the buyer assigns their contractual position to a third party.
The question is unavoidable:
Does that assignment cause the 6% rate to fall away?
The answer doesn’t lie in the assignment itself, but in the use the property now takes on. Item 2.42 doesn’t protect a signature: it protects an intended use. If the original buyer assigns their contractual position and the new purchaser does not, at the deed of sale, take on the commitment that the property is intended as a permanent primary residence, the eligibility condition is broken.
That is why a seemingly formal detail becomes decisive: the CPCV must expressly state that the property is intended as a permanent primary residence. Not as boilerplate, but as the documentary foundation of the entire arrangement. What makes it possible to prove the intention that justified the reduced rate.
We await the tax authority’s position, but what we believe should happen, in practice, is the loss of entitlement to the benefit, requiring the repayment of any VAT that was under-charged, under Article 94 of the VAT Code, within a period extending to four years.
Which leaves the question that should be on the table before any assignment takes place:
When the contractual position changes hands,
Who inherits the intention? And
Who inherits the tax bill when it is no longer met?
See you later,
Ana Coelho
