V.A.T - New Law & Clarifications
As from March 1st 2012, Value Added Tax in Cyprus was increased from 15% to 17%. However, as from January 1st 2013 it is 18%.
For Property Buyers:
a] The applicant must be a permanent resident of Cyprus before signing the Sales Agreement.
b] The Sales Agreement is signed with 18% VAT. A provision is added that in case the Purchaser is approved by the Vat Authorities, he will provide the Vendor with the approval and the Vendor shall claim the difference back from the VAT (form 4B) if he has already paid it to the Authorities (VAT payable every 3 months). After the approval, every other payment shall bear 5%. When the Vendor receives the return from the VAT, he either pays it back to the Purchaser or gives him a credit note.
c] In case of an under construction property, the water and electricity bills must be sent to the VAT within 6 months after the delivery of the property to the Purchaser.
Therefore an E.U. citizen who is not a permanent resident of Cyprus cannot get this benefit unless he first comes to Cyprus, becomes a permanent resident and after 2 years buys a property.