Areas of Practice

VAT on Real Estate

For those buildings for which an application for a town planning permit was submitted prior to the 1.5.2004, no V.A.T. is charged in the event of a sale.

For those after the above date, a V.A.T. of 15% is charged (no V.A.T. is charged on land/building plots for purchases prior to 1.1.2008).

In case of a house purchase which is classed as the main/permanent resident of the purchaser, and provided that it is not larger than 250 sq.m., theV.A.T. is refunded up to 10% (out of the 15%). This means that the V.A.T. must be fully paid and then the Authorities will require proof that theapplicant is using the property as his main/permanent residence (with the production of water/EAC/CYTA bills, payment of taxes etc). The applicantwill be required to declare that he/she has no other house as such (permanent), whereas foreign purchasers must live in the house 186 days p.a. at least. So, it is reasonable to expect a required period of say 6 months after the property is lived in, in order to expect the refund. V.A.T. is paid only once, so if you buy a property and you pay V.A.T. and then you decide to sell it, no V.A.T. is charged. In case you buy property in order to sell it and which is not used, not even by the purchaser, not let etc, no V.A.T. is paid, but if you decide to sell it, a V.A.T. must be charged by the original buyer to the new buyer (to be paid to the Authorities). If a person claims and receives a refund, he must live in the house for 10 years. If he leaves the house e.g. he decides to sell the property on the 8th year, he must refund the V.A.T. refund to the Authorities in proportion to the period outstanding out of the ten years e.g. 2/10. If he lives in the house for 10 years, he can acquire other property with the same V.A.T. rights. In this context house includes also a flat. It includes also those cases where a person erects a house. V.A.T. is charged on all buildings purchase and including V.A.T. on payments when building a house. Refund is only given to residents only (flats/ houses) and for no other.



For commercial/industrial accommodation developed for own use, no V.A.T. is charged (100% discount).



Rents are not charged with V.A.T. (but licenses are).



*Note:
The area is calculated on the total covered area of the property, including storerooms, covered parking, covered verandas and excluding:

  • ● Upto 5 sq.m. – engine/boiler room
  • ● Upto 7 sq.m. – storerooms
  • ● Upto 36 sq.m. – covered parking
  • ● Upto 40 sq.m. – covered verandas

 

V.A.T. is not charged/is refunded on buildings which are used for as business e.g. hotels, offices, shops etc.



V.A.T. on Real Estate
For those buildings for which an application for a town planning permit was submitted prior to the 1.5.2004, no V.A.T. is charged in the event of a sale.



For those after the above date, a V.A.T. of 15% is charged (no V.A.T. is charged on land/building plots for purchases prior to 1.1.2008).



In case of a house purchase which is classed as the main/permanent resident of the purchaser, and provided that it is not larger than 250 sq.m., theV.A.T. is refunded up to 10% (out of the 15%). This means that the V.A.T. must be fully paid and then the Authorities will require proof that the applicant is using the property as his main/permanent residence (with the production of water/EAC/CYTA bills, payment of taxes etc). The applicant will be required to declare that he/she has no other house as such (permanent), whereas foreign purchasers must live in the house 186 days p.a. at least. So, it is reasonable to expect a required period of say 6 months after the property is lived in, in order to expect the refund. V.A.T. is paid only once, so if you buy a property and you pay V.A.T. and then you decide to sell it, no V.A.T. is charged. In case you buy property in order to sell it and which is not used, not even by the purchaser, not let etc, no V.A.T. is paid, but if you decide to sell it, a V.A.T. must be charged by the original buyer to the new buyer (to be paid to the Authorities). If a person claims and receives a refund, he must live in the house for 10 years. If he leaves the house e.g. he decides to sell the property on the 8th year, he must refund the V.A.T. refund to the Authorities in proportion to the period outstanding out of the ten years e.g. 2/10. If he lives in the house for 10 years, he can acquire other property with the same V.A.T. rights. In this context house includes also a flat. It includes also those cases where a person erects a house. V.A.T. is charged on all buildings purchase and including V.A.T. on payments when building a house. Refund is only given to residents only (flats/ houses) and for no other.



For commercial/industrial accommodation developed for own use, no V.A.T. is charged (100% discount).



Rents are not charged with V.A.T. (but licenses are).



*Note:
The area is calculated on the total covered area of the property, including storerooms, covered parking, covered verandas and excluding:

  • ● Upto 5 sq.m. – engine/boiler room
  • ● Upto 7 sq.m. – storerooms
  • ● Upto 36 sq.m. – covered parking
  • ● Upto 40 sq.m. – covered verandas

 

V.A.T. is not charged/is refunded on buildings which are used for as business e.g. hotels, offices, shops etc. V.A.T. on Real Estate