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What has happened? Almost unanimously, and under scrutiny from Brussels, the Cypriot Parliament passed a law allowing for a reduced VAT rate of 5 % levied on first homes.
How will it work? The discounted VAT of 5% (the full rate is 19%) will apply to the first 130 square meters of the first residence in Cyprus - for private houses and apartments alike - and up to a value of €350,000, provided that the total value of the transaction does not exceed €475,000, and the total built-up area does not exceed 190 sq.m.
Another paragraph provides that for persons with disabilities, the discounted VAT will apply to the first 190 sq.m. of the buildable area.
The law also provides for a transitional period so that the new rules do not apply in cases where a town planning permit has been issued or an application for a town planning permit has been submitted within four months of the entry into force of the law.
Source: Cyprus Property News
Photo by Datingjungle on Unsplash
