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Cyprus to increase VAT from a reduced rate of 5% to 19% for certain property types

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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:

  1. 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.
  2. 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.
New home in Cyprus 981 listings on Tranio

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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