Reduction of VAT to 5% for Non-European buyers

Pantelis M.Leptos who has been elected as the new Chairman of the Land and Building Developers Association of Cyprus is pleased  that the Cyprus government, has announce the reduction of VAT to 5% for buyers from Non-European Countries.

Based on the Value Added Tax Law which is valid for contracts of sale or other agreements which are related to the delivery or construction of residences, it has been decided that as of June 8th 2012, the reduction of Value Added Tax will be implemented, to five percent (5%), on all residences which are being used or which will be used by a beneficiary, as his/her main and permanent residence within the Republic, and who are citizens of countries which do not belong in the European Union.

The Law clauses include persons who reside in the Republic for any period of time, and who use the residence which they declare as their main and permanent residence while they are in the Republic. Those persons who purchase or build a residence within the Republic, for the purpose of investing or renting to other persons, or for the purpose of using this residence for any monetary activities, are excluded.

In addition, in order to ensure equal treatment of persons who reside mainly in mountainous regions, according to the above stated law, if the residence has a shed, up to 2.20 meters, this will not be calculated in the total area (sq meters) of the residence, since intense altitude variations exist in the plot of land, and it cannot be included as a residential area.

All declarations must be submitted according to the procedure which has been published in previous circulars of the VAT service, and can be found in the Official Newspaper of the Cyprus Republic.

Photo: Aphrodite Gardens, new Leptos Project in Paphos