VATupdate

Share this post on

Cyprus Implements 5% VAT Rate for Home Purchase or Construction

  • Circular 11/2023 issued by the Cyprus Tax Department introduces changes to the VAT rate for home purchase or construction
  • The VAT rate is reduced from 19% to 5% for houses designated as permanent residences
  • The 5% VAT applies to the initial 130m² of the buildable area, with a cap at €350,000 for the house cost
  • If the buildable area exceeds 190m² or the house cost surpasses €475,000, the VAT rate is 19%
  • Exceptions include a 5% VAT rate for individuals with disabilities and families with more than three children
  • Eligibility for the reduced VAT rate requires a planning permission granted before 31 October 2023 and applications must be submitted by 15 June 2026
  • Previous applicants can reapply within a 10-year period from their initial application
  • Examples of VAT calculations are provided for different scenarios

Source: eurofast.eu

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

Sponsors:

Advertisements: