VAT on Property and Land Regulations
As one of the conditions laid down for Cyprus's ascension into Europe, VAT has been levied against the construction of new properties with planning permission granted after May 2004 at 15%.
There are some concessions, primarily anyone purchasing a property in Cyprus for the first time can receive reimbursement of two thirds of the VAT they paid. A purchase according to Cypriot law is concluded once Title Deeds have been issued in the name/names of the purchaser/purchasers. This is important in so far as prior to this point you cannot claim the VAT back and therefore you should avoid lengthy delays in the issuance of your Title Deeds from your developer.
Once you have received your Title Deeds you could expect a refund upon application in approximately three months.
There are conditions in so far as; if you resell the property within 10 years of your refund, you will be obliged to repay the refunded VAT at 10% per annum, for example, if you sold after 8 years, you would pay 20% of the refund back. There are of course more rules relating to VAT and we thoroughly urge you to take legal advice.
VAT on land was due to be enforced on the 1st January 2008, enforcement and was delayed for a year, however it is now currently active.