5% VAT rate on new homes extended

The parliament recently passed a law, with 34 votes supporting and one opposing, that allows beneficiaries to apply for a reduced 5% VAT rate within one year after purchasing their primary residence.

The AKEL parliamentary group proposed the bill, which seeks to alter the Value Added Tax Law. This change will permit the Tax Commissioner to process requests from qualified individuals, enabling them to benefit from a 5% rate on new home purchases or constructions within twelve months of their acquisition.

AKEL MP Andreas Pasiourtidis noted that some beneficiaries might delay their applications for reasons such as health problems or living overseas. The legislation provides these individuals a twelve-month period to submit their applications and access the reduced VAT rate.

Diko MP Chrysis Pantelidis commended the legislation, supporting it and noting that the market has remained stable despite previous concerns following the adjustment of the VAT rate six months earlier.

Stavros Papadouris, representing the Movement for Ecologists – Citizens’ Cooperation, supported AKEL’s amendment, acknowledging that although the law sets a general standard, the Tax Commissioner must retain flexibility and sensitivity to address exceptional cases.

 

Source: Cyprus Property News

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