Cyprus to increase VAT from a reduced rate of 5% to 19% for certain property types
MP Stavros Papadouris has introduced a bill representing new rules to the reduced VAT rate on residential property acquisitions. The changes would apply only to buyers of new buildings. The bill has already been reviewed by the cabinet and now it needs parliamentary approval.
According to the new bill, the following changes will be made:
- The low VAT rate of 5% will only apply to the first 180 square meters in houses with a cost of 450,000 euro or less and an area of less than 220 square meters.
- In the case of apartments, the reduced rate will apply to properties with an area of less than 110 square meters. The first 90 square meters will be subject to reduced VAT.
1,879,000 €
Total area 174 m² 2 bedrooms
460,000 €
Total area 122 m² 2 bedrooms
951,000 €
Total area 273 m² 3 bedrooms
534,000 €
Total area 131 m² 3 bedrooms
347,000 €
Total area 197 m² 2 bedrooms
545,000 €
Total area 146 m² 3 bedrooms
Currently, when purchasing primary properties in Cyprus, a reduced VAT rate of only 5% is payable for the first 200 square meters. The remaining area over 200 square meters is taxed at 19%. This applies to residential properties of less than 275 square meters. For secondary ones, VAT is 0%.
Source: Cyprus Property News
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