Cyprus VAT Break For New Build Property
With the Cypriot government bringing in a €220 million pound austerity package, a number of tax cuts related to property have been announced early September to help the economy move along with the additional pressures of austerity measures.
New measures the result of pressure groups:
It appears that lobbying from the Land and Property Owners Association (KSIA) and the Land and Building Developers Association (CLBDA) has brought debate in parliament, the result of which could include a 5% reduction in VAT for first time buyers of property that will be used as a home up to 250sqm, with VAT being kept at 15% for residences between 250 and 300sqm.
Property transfer fees suspended?
There has also been talk that the unpopular property transfer fees may be suspended for a 3 year period.
Property sales continue to fall in Cyprus:
With a 13 month fall in sales of property on the Island, meaning sales are down 20% year on year since the economic downturn started a few years ago. The Cyprus property market is in need of some form of stimulus even though the amount of bargain properties on the island is at a record high.
Amazing bargains to be had in Cyprus:
While sales are reportedly down 28% over the last couple of months according to OPP (Overseas Property Professional) the fact still remains that property is being sold with price tags slashed by up to 1/3 from their high value. With this in mind the cash rich investor must see Cyprus as a great place to invest.
Despite this position, only 122 properties were sold to foreign buyers in July. The introduction of a VAT break will come as a welcome move to sellers who should be able to pass on the savings to the reluctant foreign buyers that are still needed to give the Cyprus property market an injection of life.