Cyprus’ Minister of Finance, Charilaos Stavrakis, says the Government is confident that it will be able to secure a postponement of the introduction of VAT on building plots.
Under its commitments to the EU, Cyprus was to have levied a 15 percent VAT charge on the sale of building plots on January 1 2008. However, negotiations last year succeeded in delaying its implementation until the August 1 2008.
The prospect of the introduction of VAT increased the number of properties bought and sold during 2007. As a result, many buyers paid higher prices to beat the VAT deadline.
According to the Finance Minister, “the imposition of VAT affects a small part of the total land sales, since it concerns plots sold by real estate agents registered in the VAT register, while the land sold from individual to individual via a real estate agent is not subjected to VAT”.
In the meantime, the Finance Ministry is investigating a method by which transfer duties (Property Transfer Fees) may be abolished by returning the monies paid by way of a special benefit; details have yet to be announced.
(See earlier story ‘Cyprus bank eases loan restrictions‘)
