Jun 9, 2023
Reduced VAT on first homes in Cyprus
- Reduced VAT rate is applicable for the first 130 m2 of a primary residence, either a house or an apartment, with a value of up to €350,000.
- The transitional period, during which the proposed regulations will not apply in cases where urban planning permission has been obtained or an application has been submitted within 4 months from the effective date of the law.
The law has been passed following the issuance of the reasoned opinion by the European Commission to Cyprus for failing to correctly implement the EU VAT rules for dwellings purchased or constructed in Cyprus, since the reduced VAT of 5% for primary dwellings in Cyprus was, until recently, applicable for the first 200 m2 without imposing any additional limitations.
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