VAT - Refund Scheme
Prior to Cyprus ' accession to the EU in 2004, the supply of immovable property was exempt from Value Added Tax (VAT).
Since that time, VAT has been imposed on the sale of all new property at the rate of 15%. However, a rebate scheme has been introduced for certain categories of buyers and certain types of properties, that enable buyers to claim a refund.
- Sales of land are exempt from VAT although it is anticipated that value added tax will be introduced on sales after 1st January 2008.
- Sales of resale Cyprus property are exempt from VAT (assuming that the property has been used).
- Buyers of individual properties pay VAT at the rate of 15% on the construction costs .
- Those who are buying Cyprus property from a property developer are liable for VAT if the application for a Town Planning Permit was submitted after 1st May 2004.
Those eligible to apply for the refund are:
- Those whose building applications were made after May 1, 2004.
- Over 18 years of age.
- Cypriot citizen or citizen of an EEU country who is Permanent resident of Cyprus .
- Those who don't use any other property in Cyprus as their main and permanent residence…….
In order to qualify, those who receive the refund must hold the property for at least ten years, or return a proportionate part of the refund.