Sales of newly constructed properties are subject to VAT (currently 19%).
Since 8th June 2012, any person that is buying his/her first permanent residence in Cyprus can apply for a reduced VAT rate of 5%. The Purchaser must complete a form with the VAT Authorities declaring his/her intention and commitment to use the house that he/she is purchasing, as the permanent residence for himself and his family in Cyprus.
The property must be used only for personal and family living of the Purchaser. It is not permitted to generate any income such as rental fees, or to utilise the property as an investment or any other type of business.
The VAT Authorities may investigate to ensure that the purchaser has honoured the requirements.
If the purchaser has ceased to use the property as his permanent residence or sells the property within 10 years, then they must pay the remaining Cyprus Property VAT of 14%
Income Tax Rates in Cyprus
The following Income Tax rates apply to individuals:
|Chargeable Income||Tax Rate|
|€0 to €19,500||0%|
|€19,501 to €28,000||20%|
|€28,001 to €36,300||25%|
|€36,301 to €60,000||30%|