5% VAT on the Purchase of Building Land
- October 14, 2019
- Posted by: Elias Christofi & Co Ltd
- Category: Corporate & Fiduciary Services
The Cyprus Council of Ministers has decided that a VAT refund will be given to those who bought land in order to build their main residence in Cyprus.
The goal is to reduce the VAT rate of acquiring land from 19% to 5%. This reduces the VAT rate to the same VAT rate which is applied for the individual to build his/her main residence. The eligible individuals will be able to claim a refund of 14% on the value of the land purchased.
On the 25th of September 2019, the Cyprus Tax Department announced that whoever is interested to apply for this VAT refund scheme, must submit the “Application for refund of VAT imposed on the acquisition of land for the construction of residence under the reduced VAT rate” to the district Tax Office.
Land acquired after the 2nd of January 2018 by an eligible individual may qualify for a VAT refund application. However, the individual is able to apply only if he/she has started living in the building. The individual must also submit a living expense evidence such as water and electricity bills.
More information can be found at the Cyprus tax department.