SEVERAL people have contacted me who have purchased property on the Island asking if they are eligible to apply for the special grant from the government.
Cyprus VAT grant scheme
In 2006, the Cypriot government enacted the Special Grant for Purchasing or Building a Residence, Law N.91(I)/2006 to help lower-income families afford a home in the face of ever-increasing house prices. The scheme enables first-time buyers who qualify under this scheme to a grant of two-thirds of the VAT they paid for their new home.
The scheme applies to EU citizens who are permanent residents of Cyprus. VAT grants are available under the following criteria:
- The purchased property is the sole main residence of the applicant.
- The applicant does not own any other property in Cyprus that is used as a main residence.
- The applicant should be at least 18 years of age and must be an EU citizen.
- The applicant must be permanently residing in Cyprus.
People may only claim the grant if they can prove that they are permanent residents and the authorities will check their usage of water and electricity, their source of income etc., to ensure that they are actually living on the Island permanently.
Limitations
- On receipt of the grant, the beneficiary is required to use the property as their main and permanent residence for minimum period of ten years.
- If the beneficiary ceases to use the residence as their main and permanent residence before the end of the ten-year period, they are required to inform the Ministry of Finance and return a proportion of the grant. (Note: This condition does not apply if the beneficiary transfers ownership of the property to their children or in the event of their death.)
- If the beneficiary decides to buy or build a new residence before the expiry of the ten-year period they may apply again for the special grant. If approved, they will be able to set off with the amount of the grant eligible to receive for the new property.
For more information on the Cyprus VAT grant scheme for first time buyers, visit Cyprus Value Added Tax laws relating to property