Cyprus VAT - Property Tax - New Builds-Exceptions

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Cyprus Property VAT (Value Added Tax) on Purchases

Cyprus property VAT is added to purchases at the rate of 15%, where the property is a new build with the building permission applied for after 1 May 2004. Property building permissions applied for before 1 May 2004 do not attract Cyprus property VAT. Real estate agencies should specify the Cyprus property VAT status of each property for sale. If they do not clearly indicate the VAT status, make sure you clarify this point, since an extra 15% on your property purchase makes a considerable price increase.

When the purchase (house or flat) is the buyer's first private residence, they are entitled to apply to the local authorities to claim back 10% of the 15% VAT already paid. However, you need to pay the amount in full first, and then make the claim; in effect (paying) only 5% VAT. These are economic incentives for first-time buyers.

Exemptions to VAT on Cyprus Property Purchases:

You must live in the property for 10 years. If you sell the property after, say, 7 years, you will be required to refund the VAT.
You must use the property for no less than 186 days per year, proving the property is your permanent residence with water, electricity and telephone invoices.
You pay VAT once. When you sell your property, there is no VAT.
VAT is not paid if you do not live in or rent the property. When you sell the property, as with an investment property, VAT is charged by the original buyer to the new buyer, to be paid to the government.
Resale properties have NO Cyprus VAT added. A resale property is a second hand property.
Land purchases have NO VAT added although VAT will be applied from 1 January 2008.

VAT refund is based on a formula using the area of the property in m2 (square meters) and the cost to build in cost/m2. This formula is independent of the purchase price of the property.

When new laws on Cyprus property VAT are available, they will be added here.

Please contact us for further information or please contact:

Joanna Koukounis - Lawyer - Legal Consultant - in Paphos, Cyprus.

Tel: 00357-26944077 E-mail: koukjoan@spidernet.com.cy

Click below links for any information page.

Cyprus Property Lawyer - Real Estate Agents in Cyprus - Transfer Tax-fees

Stamp Duty - Council of Ministers - Bank of Cyprus - Mortgages in Cyprus

Immovable Property Tax - Capital Gains Tax - Residence Permit in Cyprus

Cyprus Income Tax - Work Permit in Cyprus - Overseas Mortgages

Transfer Money to Cyprus

Andrew Sharpe, a British expatriate, has been living in Cyprus since 1977. He is married to a Cypriot and has four children. Thanks to the many years he has lived in Cyprus, he is able to offer a hands-on approach to the many unknowns that may await any prospective resident, providing a very relaxed helpful, information service for property sales. Cyprus property has offices in all the island's major towns, i.e. Nicosia, Limassol, Paphos/Pafos, Protaras, Larnaca/Larnaka and Platres. Details on property finance, property sales, laws on purchasing property in Cyprus. Regular web site updates.

E-mails replied to within 24 hours.

Cyprus Fax/Tel 0035725571715 Mobile 00357 99537985 E-mail andrew@cyprusprop.com

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