We would like to bring to your attention a recent legislation update passed by the Cyprus Parliament that could have a significant impact on your future property investments in Cyprus.

 

The Cyprus Parliament approved new legislation that introduces adjustments to the Value Added Tax (VAT) applied to the purchase of primary residences, including houses and apartments. This legislation replaces the previous blanket 5% VAT rate on the first 200m² with a more nuanced system.

 

Under the new system, a reduced 5% VAT rate will be applicable to the purchase or construction of primary residences, subject to specific conditions being met in relation to the size and value of the residence. Let’s break down these conditions for you:

 

Size: The reduced 5% VAT rate will apply to the first 130m² of the residence. If the residence exceeds 130m² but is less than 190m², the area exceeding 130m² will be taxed at the standard 19% VAT rate. For residences exceeding 190m² in size, the standard 19% VAT rate will apply to the entire property.

 

Value: The reduced 5% VAT rate will apply to the first €350,000 of the residence’s value. If the residence exceeds €350,000 but is less than €475,000, the value exceeding €350,000 will be subject to the standard 19% VAT rate. For residences exceeding €475,000 in value, the standard 19% VAT rate will be applicable to the entire property.

 

It is important to note that these changes include a transitional period. During this period, the new regulations will not apply if a planning or building permit was issued before the end of October 2023, and the VAT application was submitted within three years from the enactment of the legislation.

 

Please keep in mind that this publication is intended as a general guide and for informational purposes only. It does not claim to be comprehensive or provide professional advice

 

CX Financia valuable help!

CX Financia is a leading financial services provider in Cyprus, offering a wide range of services to clients, including residence permit services. Our expertise in navigating the complexities of Cyprus legislation allows us to assist clients in obtaining residence permits and make informed investment decisions.

 

Our residence permit services include:

 

• Residence Permit Applications: We assist clients in preparing and submitting residence permit applications, ensuring that all necessary documentation is in order and requirements are met.

 

• Investment Planning: We offer comprehensive investment planning services, helping clients identify suitable investment opportunities that align with their goals and comply with Cyprus regulations.

 

• Tax Planning: Our team of tax experts can provide advice on optimizing tax structures and minimizing tax liabilities associated with property investments and residence permits.

 

• Legal Support: We work closely with reputable legal professionals to provide legal support and ensure compliance with all relevant laws and regulations throughout the residence permit application process.

 

• Immigration Services: CX Financia can also assist with immigration-related services, including visa applications, relocation support, and assistance with residency requirements.

 

By combining our in-depth knowledge of Cyprus legislation and our commitment to personalized service, we aim to make the residence permit application process smooth and efficient for our clients.