First Home VAT - The EU said "no" - What will apply now?
CHARALAMPOS ZAKOS WRITES (https://www.brief.com.cy/oikonomia/kypros/fpa-katoikias-eipe-ohi-i-ee-ti-tha-ishyei-pleon)
The thriller continues with the 19% VAT on the First Residence, as the revised bill reached the Parliament and while Brussels seems not to agree with the proposals of the parliamentary parties regarding the deletion of the square meters from the provisions for the VAT of 5%, but also the proportionality in relation to the total value.
At the same time, in the revised bill, however, there are changes, which concern the total value of both houses and apartments so that the reduced VAT rate of 5% can be applied on the one hand and on the other hand properties that exceed the limit that will be voted on.
In particular, according to the revised bill the total value of the properties increases from €350,000 to €385,000 for houses and from €200,000 to €220,000 for apartments.
Now with regard to the square footage in the new bill, nothing changes as citizens will be asked to pay 19% VAT for all square footage if their home exceeds 220 sq.m. (the change the EU wants is for 5% VAT to apply to homes up to 220 sq.m. with 5% applied to the first 170 sq.m. and 19% for the remaining 50 sq.m. But in the event that the house exceeds 220 sq.m., the right to 5% VAT will automatically be lost and therefore the owner will pay 19% for all square meters. For example, if someone builds a house of 250 sq.m. pay 19% VAT for all 250 sq.m.).
The same will apply to apartments entitled to 5% VAT for a total area of up to 110 sq.m. (the first 90 sq.m. with 5% VAT and the remaining 20 sq.m. with 19% VAT, and if they exceed 110 sq.m. no right is granted for a reduced VAT rate.
Read more: https://www.brief.com.cy/oikonomia/kypros/fpa-katoikias-eipe-ohi-i-ee-ti-tha-ishyei-pleon