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VAT reduction for first-time home buyers agreed

A compromise deal has been reached on a reduction in the VAT payable on new homes by first-time buyers. The law will come into effect on 1st October.

FOLLOWING a series of proposals, counter proposals, discussions and debates, a compromise deal has been reached on the VAT reduction for first-time home buyers.

With 33 MP voting in favour and 18 against, the bill reduces the VAT payable on new homes measuring up to 275 square metres to 5%.

In addition to the 275m2 for the dwelling, there are additional allowances of:

  • Up to 36m2 for covered parking
  • Up to 5m2 for an engine/boiler room
  • Up to 7m2 for storerooms
  • Up to 40m2 for covered verandas

If the government accepts the bill, the changes will come into effect on 1st October.

Agreement on the compromise bill was reached yesterday following an urgent meeting between the Cyprus Finance Minister, Kikis Kazamias, and the House Finance Committee.

It is hoped that the reduction in VAT will help boost the Island’s residential property market and help young families to get a foot on the housing ladder.

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