NEWS: VAT ON PROPERTY IN CYPRUS
VAT is a complex area affecting all types of property transactions, which is
constantly changing. The Cyprus House of Representatives has
passed and amended the Law of Value Added Tax on the 29th
April 2004 in order to harmonize with the EU legislation except
in the cases where Cyprus has received derogations during the
accession negotiations. As from the 1st May 2004 VAT is
imposed at a rate of 15% on the purchase of a newly built second
home (apartments, houses) or a newly built commercial or
industrial building. This includes both the purchase of a house
or an apartment and it covers the construction costs and the
cost of Land. For the first time house buyers it will be 5%.
No VAT is paid if the application for the
planning permit was filed with the appropriate authority before May
the 1st 2004. The sale of Land continues to be exempt
until 31st December 2007.
