NewsLocalReduced VAT rate for first-time home buyers: one in three are ineligible

Reduced VAT rate for first-time home buyers: one in three are ineligible

About one in three people who benefitted from the reduced rate of 5% VAT for first-time home buyers and came under the microscope of the Tax Department in the past two months are ineligible.

This is what Philenews reported on Thursday citing Finance Minister Constantinos Petrides who also said these buyers should be charged 19% VAT, totaling €16.2 million.

The ineligible ones either bought a summer house, branding it as their main residence, or apartments which they registered in the names of their children and then rented them out.

Also, in some cases foreign investors have bought luxury apartments and mansions worth millions within the framework of the Cyprus Investment Program so as to get a Cypriot passport. But they don’t use the real estate and some go as far as to rent it out on short-term.

The Tax Department’s audits reveal a great abuse of this so-called “social measure” for which the European Commission has initiated an infringement procedure against Cyprus.

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