22.01.2024
The European Commission has approved a law passed by Parliament to reduce the VAT rate to 5% on the purchase of primary residences, Finance Minister Makis said. Keravnos on Monday.
In June 2023, Parliament approved a law introducing a reduced VAT rate of 5% on the first 130 square meters of primary residence, which came into force in November 2023. However, the Commission initially insisted on applying the reduced VAT rate only for the first 110 square meters. The Minister of Finance held numerous negotiations with the European Commissioner for Financial Affairs and the head of the relevant Directorate General in order to obtain the consent of the Commission.
According to the law approved by Parliament, a reduced VAT rate applies to the first 130 square meters of the main residence, provided that the cost of the main residence was up to 350,000 euros, the total transaction value did not exceed 475,000 euros, and the total internal area did not exceed 190 square meters .
Many businessmen in Cyprus have expressed concerns about the war between Israel and the militant group Hamas, as well as the economic impact of attacks on commercial ships in the Red Sea. “We therefore have a surplus budget for 2024, and the budget includes protective measures to cope with these disruptions and geopolitical events, as well as the subsequent negative impact of them,” Keravnos added .
