Do I pay Vat on Properties in Cyprus ?

Is there Vat on resale properties?
No , there is no VAT on resale Properties as the Vat has already been paid. 

Do I owe VAT on the purchase of a new home?
Yes, Vat will need to be paid 19 % or 5% ( Reduction ) for your first home. 

Is there Vat when buying land ? 
Typically, yes. There are exceptions in the law pertaining to the sale of land, and these exceptions relate primarily to the seller's circumstances (e.g., if the seller has sold land before, etc.), so it is always prudent to assume that VAT will be due. Determining whether or not land is subject to VAT can be a complicated process, and we will do so on a case-by-case basis.

What is the application for VAT reduction?
As mentioned previously, individuals can apply for the VAT reduction application to reduce the VAT rate from 19% to 5%, but only for their home, and it is in a sense a "government grant." The discount only applies to the first 200 square metres of the house; if the house is larger than 200 square metres, part of the purchase price will be subject to 5% VAT and part will be subject to 19% VAT. The buyer who obtains a VAT discount must maintain the property for a period of ten years in order to retain the entire VAT discount. The aforementioned property may still be sold before the end of the 10-year period, but the VAT authority must be reimbursed for the remaining years. In addition, the buyer who receives the VAT reduction cannot rent out the property, as this would contradict the grant's underlying principle.

I'm purchasing a new property for investment purposes; am I eligible for VAT reduction?
If you intend to rent out the property, either temporarily or permanently, you are ineligible for the VAT reduction.

I am purchasing a new property in the name of my business; am I eligible for a VAT reduction?
No, Vat reduction is only for first homes. 

Is the VAT discount "one-time"?
One VAT reduction grant is permitted at a time. This means that if you sell a property for which you received a VAT reduction or if 10 years have passed since you received a VAT reduction, you can reapply for a new VAT reduction on another property.

My spouse and I wish to purchase two new properties. Are we eligible for two VAT reductions?
There is only one VAT reduction allowed per married couple. You may purchase multiple new properties, but you are only allowed one VAT reduction authorization.

When may I apply for a VAT discount?
The application can only be submitted after you have signed the purchase agreement and provided that the agreement has been recorded with the Land Registry.

What VAT rate do I pay if I pay the seller before my VAT reduction application has been submitted or even approved?
Typically, you will be required to pay 20-30% of the property's purchase price simultaneously with the signing of the purchase agreement. This amount, plus 19% VAT, will be paid to the seller. As soon as your VAT reduction is approved, you must provide the approval to the Developer, who will then adjust the initial payments you made to account for the reduction in VAT from 19% to 5%. This indicates that you may receive a credit note for the initial payments made at the higher VAT rate. Then, all subsequent payments should include 5% VAT.

What happens if my property exceeds 200 square metres?
The VAT reduction is available for a maximum covered area of 200 square meters. This means that the applicable VAT rate for the first 200 square metres is 5%, while the rate for the remainder is 19%. This may sound complicated, but it can be simplified at the time of payment so that you do not have to worry about the applicable VAT rate each time.

Am I exempt from paying Transfer Fees to obtain the title deed if I have already paid VAT on the purchase price of the property?
You should only pay a nominal fee to the land registry for the registration of the property's title deed in your name if you can provide evidence that you paid VAT on the purchase price. The Land Registry will require evidence (such as receipts for payments made to the seller) that demonstrates the VAT has been paid in full. The land registry transfer fees will be nominal provided that the land registry accepts the property's value as stated in the purchase agreement. If the land registry valuation of the property is higher than the contract purchase price, transfer fees may be based only on the difference between the two amounts. Our Property Frequently Asked Questions provide more information on the Land Registry Transfer Fees calculation.