NewsLocalGranting reduced VAT on primary residences purchase again under review

Granting reduced VAT on primary residences purchase again under review

Interested parties have again changed their mind when it comes to the granting of reduced VAT on the purchase of primary residences in Cyprus.

And this despite the fact that the European Commission continues breathing down Cyprus’ neck over the matter, Philenews reported on Tuesday.

A few months back, they had asked for the separation in the taxation of houses and apartments and that’s why the  Ministry of Finance proceeded to revise the original bill.

Initially it provided for the imposition of 5% VAT on 140 sq.m. property with an area of ​​up to 200 sq.m.

But, on Monday they demanded the implementation of a single policy for houses and apartments without restrictions on the total area and value of the real estate.

One of the moderate proposals is the imposition of 5% VAT on 170 sq.m. of all properties, with an area of ​​up to 220 sq.m.

Something, afterall, that the revised bill provides in relation to residence whose total value is not exceeding €350,000.

Currently the law provides for the application of a lower VAT rate of 5 per cent for the first 200 sq.m. of primary residences, without any qualifications. The norm is 19%.

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