YESTERDAY, the House of Representatives passed a number of tax incentives designed to boost business activity and attract foreign investment to Cyprus.
Changes to the income tax laws concerning the 5% VAT payable on new homes have been expanded to include non-EU citizens.
Changes to Property Transfer Fees, which came into effect last December for a period of six months, have now been extended until the 31st December 2012.
The changes only apply to the first sale of a property, where the contract is dated and deposited at the Land Registry by the end of the year. Specifically:
- For those who pay VAT on their house purchase, Property Transfer Fees are waived.
- For those who do not pay VAT on their purchase, Property Transfer Fees are reduced by 50%.
Property Transfer Fees become payable at the legal completion of a sale and enable the ownership of a property to be transferred from the vendor to the purchaser by the Land Registry.
The tax incentives are designed to boost property sales by reducing the cost of home ownership and stimulate growth in the Cyprus property market.