Throughout Cyprus and especially in Limassol, there is intense construction activity, mainly of residential development. The reduced VAT rate of 5% is imposed for the construction or purchase of a house, provided that the residence will be used as the main and permanent residence (first residence) of the beneficiary for the next 10 years.
In particular, today the reduced VAT rate can be used by a beneficiary, defined as any natural person who:
- has reached the age of 18 on the date of application for the reduced rate;
- intends to use the residence for which he is applying as the main and permanent residence in Cyprus;
- does not own any other residence in Cyprus on which the reduced VAT rate has been imposed.
The property for which the buyer is a beneficiary and intends to apply should be a new home, which will be used for the first time from the date of delivery or construction as defined by the Eighth Annex of the VAT laws of Cyprus.
All the houses are eligible for the first 200 sq.m. buildable area as determined on the basis of the building factor. Area over 200 sq.m. will be charged with the current base rate, i.e. additional square meters over 200 are taxed at 19%.
One of the most innovative residential developments in Limassol and for the country as a whole is the Sunset Gardens from Imperio. Sunset Gardens is a lush residential development and has numerous amenities, such as swimming pools, restaurant, supermarket, gym, tennis and basketball court, etc., while bordering the largest casino in Europe, the City of Dreams Mediterranean. The Sunset Gardens enables young professionals, entrepreneurs and young couples to acquire their first home. The very favorable terms of advance payment of the total property price and the reduced VAT rate of 5% for the first residence, combined with the extremely low monthly installment, make the choice of Sunset Gardens as the smartest and most profitable move.
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