STYLIANIDES GROUP

News / Lower VAT on land bought for primary residence

THE GOVERNMENT is preparing a bill exempting from payment of the full 19 per cent VAT, purchases of residentail land for the purpose of building on it an owner-occupied primary dwelling. Currently, when someone buys a finished housing unit or apartment as their primary dwelling they pay 5 per cent VAT, whereas buying a plot of land for owner-occupied housing incurs a 19 per cent VAT charge. Lawmakers had called for a change, arguing it is unfair to newlyweds who typically are buyers of undeveloped land where they plan to build their primary house. Under a bill being prepared by the finance ministry, such buyers would initially pay the full VAT rate, but would subsequently be refunded 14 per cent VAT, so that at the end of the day they pay 5 per cent on these transactions like everyone else.

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