Land

On 1st January 2008 Land will be subject to VAT at 15% which is obviously a vital element when an investment decision is being considered, we advise strongly that the Land should be acquired before the cut off date.

Buildings and Construction

No value added tax (VAT) is charged on the sale of buildings for which an application for a town and planning permit was submitted before 1st May 2004.

For those for which an application was submitted after this date, VAT is chargeable at 15%.

VAT refunds for Residents

In the case of a house purchase which is classed as the main/permanent residence of the purchaser, VAT is refunded by up to 10% (out of the 15%).

This means that the VAT must be fully paid and then the authorities will require proof that the applicant is using the property as his main/permanent residence (with the production of water/EAC/CYTA bills, payment of taxes etc).

The applicant will be required to declare that he/she has no other house as such (permanent), whereas foreign purchases must live in the house for 186 days per annum at least.

VAT is paid only once, so if you buy a property and you pay VAT and then decide to sell it, no VAT is charged.

If you buy property in order to sell it and which is not used, not even by the purchaser and is not let etc, no VAT is paid, but if you decide to sell it, VAT must be charged by the original buyer to the new buyer (to be paid to the authorities).

 VAT is charged on all purchases of buildings, including VAT on payments when building a house.

A refund is given to residents only (flats/houses) and for no other reason.

The VAT refund is based on a formula and it is independent if the purchase price/cost of building of a house.

 

Property	Cost/sq.m	Area in sq.m	Reclaim of 10% VAT
Flat One Bedroom	CY£950	65	CY£5370
Flat Two Bedroom	CY£950	100	CY£8260
Flat Three Bedroom	CY£875	130	CY£9891
Flat Three Bedroom	CY£875	150	CY£9891
Detached House	CY£1000	200	CY£11304
Semi-Detached	CY£750	200	CY£8478
Building House	CY£500	130	CY£5652
Building House	CY£500	250	CY£5652
Building House	CY£500	300	CY£0