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Cypriot Passport Acquisition and Permanent Residence Permit
Repossession Property Yield Properties

Latest news

  • 22 May 2018 Limit on citizenship scheme announced

    The Council of Ministers has decided to restrict the number of citizenships... read more

  • 3 May 2018 Oil Tank demolition in progress Irini Gardens Newzoe Developers Ltd

    The first oil tank on the old Larnaca-Dhekelia road was demolished on... read more

  • 2 May 2018 Новые строительные проекты на Кипре

    Новые строительные проекты на Кипре read more

  • 26 April 2018 The Russian returns to invest in Phinikoudes

    Viable prospect of erecting a multi-storey hotel by the Russian mogul... read more

  • 19 April 2018 VAT break for young couples buying land for first home

    Young couples buying land for their first home in Cyprus may only pay 5 per... read more

VAT break for young couples buying land for first home

   

THE GOVERNMENT has submitted a draft bill to parliament indirectly exempting from payment of 19 per cent VAT young couples who buy land for the purpose of building a primary residence. The issue is related to the passage of a law last November imposing 19 per cent VAT on building land.

In its wake, persons buying a finished housing unit or apartment as their primary dwelling must pay 5 per cent VAT, whereas purchasing a plot of land for owner-occupied housing incurs a 19 per cent VAT charge. Now, the new bill provides that, whereas newlyweds buying land for owner-occupied housing will pay the full tax rate, 14 per cent of the VAT imposed on the value of the land would be returned to them in the form of a grant so that ultimately, they only pay 5 per cent VAT. Lawmakers meanwhile have tabled a legislative proposal aiming to eliminate a distortion where certain buyers of real estate must pay property transfer fees while others do not. The bill was tabled by Disy MP Averof Neophytou. When a person buys a new property in Cyprus and pays VAT on it, he or she is not subject to transfer fees, whereas transfer fees do apply when the transaction involves a land lease. To end the distortion in the market, the proposal provides for the non-payment of transfer fees for rentals or leases of immovable property when the persons involved already pay VAT on taxable business activity.

But not all MPs are on board with the proposal, which was discussed during a closed-doors session of the House finance committee. The Greens’ George Perdikis said his party would never consent to an arrangement letting developers “off the hook.” Whereas the lease option might benefit entrepreneurship – by eliminating transfer fees – this should not be done at the expense of state revenues, he said. “There is a large discussion going on about leases in which the church is involved, and we shall under no circumstances agree to the state taking a hit in order to serve the interests of a businessman, whoever he or she may be.” After the VAT on building land was passed late last year, parliament brought regulations specifying which type of development would be subject to the tax. Protected zones and farming land were exempted.

Read more at: http://www.news.cyprus-property-buyers.com/2018/04/17/vat-break-for-young-couples-buying-land-first-home/id=00154060
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