The green light was given by the Cypriot Parliament to the new legislation amending the VAT price on the primary residence. The European Commission found that the previous provisions were incompatible with the EU regulation, hence the new amendments are now moving forward. Following the approval by the Commission, Cyprus will be again in compliance with the EU regulation.
The amendments entail the following:
- A reduced 5% VAT amount for the primary residence’s first 130 sq.m. , which applies to both detached houses, apartments and houses.
- The value concerned is up to 350,000 euros.
- The total value of the transaction must not exceed 470,000 euros
- The residence must not exceed 190 sq.m.
- People with disabilities are allowed a reduced VAT that will extend to 190 sq.m. of the property.
The bill will allow for a transition period and will not apply to cases where an application has been submitted or obtained to secure a planning permit within four months from enforcement. The new amendments override the previous bill that applied a blanket 5% VAT rate on the first 200m². The system now provides for more variations on the VAT depending on the aforementioned circumstances. The Parliament voted for this bill on the 8th of June. Investors are urged to consider the amendments in relation to their future property investments.
At Christy’s we stay on top of legal changes to offer you knowledgeable, efficient, and swift advice. Our team specialises in property investment, and our lawyers will guide you through the new VAT amendments.