The Cyprus Parliament, on 8th June 2023, approved the new legislation with regards to the application of 5% VAT rate on the purchase or construction of a building to be used as a main and permanent residence by individuals.
1st condition (130 m² threshold):
- For apartments/houses up to 130 square meters (m²), a reduced VAT rate of 5% shall be imposed.
- For apartments/houses that exceed 130 m² and are up to 190 m², a VAT rate of 19% shall apply on the square meters exceeding the threshold of 130 m².
- For apartments/houses that exceed the threshold of 190 m², a VAT rate of 19% shall apply to the whole value.
2nd condition (€350.000 threshold):
- For apartments/houses with a value up to €350.000, a VAT rate of 5% shall be imposed.
- For apartments/houses with a value that exceeds €350.000 and is up to €475.000, VAT of 19% shall apply on the amount exceeding the threshold of €350.000.
- For apartments/houses with a value that exceeds the threshold of €475.000, VAT of 19% shall apply on the whole value.
At ACLA AUDITORS, we can assist you with the preparation and submission of all the necessary documentation and procedures that are required for the request of the 5% reduced VAT certificate.