VAT Refunds in Cyprus:-
Since Cyprus joined the European Union, VAT has been imposed on the sale of all new property at the rate of 15%. (now increased to 17%)A rebate scheme has been introduced enabling certain categories of buyers to claim a VAT refund on certain types ofproperties.
The VAT regulations on property sales:-
Sales of land are exempt from VAT. Although it was anticipated that value added tax would be introduced on sales from 1st August 2008 this has not yet been implemented. It is still not clear on what types of land VAT will be imposed and how it will be collected.
Buyers of newly built property pay VAT at the rate of 17%.
Those who are buying a home from a property developer are liable for VAT if the planning application was made and the building permit issued after 1st May 2004.
Sales of resale property in Cyprus are exempt from VAT (assuming that the property has been lived in)
There is a VAT refund scheme. Cyprus introduced the VAT refund scheme to help lower income home buyers. This is how it works:
1. The purchased property is the sole main residence of the applicant.
2. The applicant does not own any other property in Cyprus that is used as a main residence.
3. The applicant should be at least 18 years of age and must be an EU citizen.
4. The applicant must be permanently residing in Cyprus.
5. The applicant should fill in a special form issued by the Ministry of Finance and a statement must appear in the government’s Gazette that this property is a first home.