articles | 06 September 2022

Granting reduced VAT on primary residences purchase again under review

Interested parties have changed their mind again when it comes to the granting of reduced VAT on the purchase of primary residences in Cyprus.

Despite the fact that the European Commission continues breathing down Cyprus’ neck over the matter, this is what Philenews reported on Tuesday.

A few months back, the European Commission had asked for the separation in the taxation of houses and apartments and that is why the Ministry of Finance proceeded to revise the original bill.

Initially, it provided for the imposition of 5% VAT on 140 square metres of property with an area of up to 200 square metres.

However, on Monday, they demanded the implementation of a single policy for houses and apartments without restrictions on the total area and value of the real estate.

One of the moderate proposals is the imposition of 5% VAT on 170 square metres of all properties, with an area of up to 220 square metres.

After all, the revised bill provides something for residences whose total value does not exceed €350,000.

Currently, the law provides for the application of a lower VAT rate of 5% for the first 200 square metres of primary residences without any qualifications. The norm is 19%.

Source: In-Cyprus

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