Lower VAT on land bought for primary residence
Purchasers of undeveloped land to build an owner-occupied primary dwelling may soon be able to obtain a partial VAT refund if a bill currently being prepared by government is approved.
The state budget for 2019 will also need to be amended to factor in the extra expenditure from the anticipated VAT rebates. The same official said he did not foresee complications, as the additional expenditures arising from VAT refunds would be relatively small, given that the monetary value of purchases of undeveloped building land since the start of the year is low. At the same time, there continues to be a lack of clarity in the law passed back in November 2017 that imposed 19 per cent VAT on the sale of building land. That law stipulated that VAT would be imposed on all sales of building plots taking place as part of economic activity. It was left to the tax commissioner to decide, on an individual basis, whether a transaction is commercial or not. Some MPs are complaining that this ambiguity leaves room for abuse or unfair treatment of buyers. Disy MP Averof Neophytou said some transactions are being treated as commercial – in which case a capital gains tax of 20 per cent is imposed – whereas others fall under income tax which may be as high as 35 per cent. One way to resolve the issue would be to apply a single rate for all transactions, he said.
Read more at: http://www.news.cyprus-property-buyers.com/2018/10/23/lower-vat-land-bought-primary-residence/id=00154863
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