Travel to Cyprus

Lawyers inCyprus- Review – Transfer tax and VAT

The new proposals for the abolishment ofCyprusproperty transfer tax for at least a period of 6 months is not looking good I am afraid to say.

We recently reported how the government were looking at ways to help theCyprusproperty markets and investors and the proposal was to abolishe transfer tax for a certain period until a permanent legislation was put in place.  Or for those who paid VAT a reduction of 50% on transfer tax would be applicable.

However, theCyprusPresident is not at all impressed and looking at it from a financial point of view for the country on a whole he feels that the country would lose a very large amount in revenue and it would make very little difference to the property market.  Definitely not enough of difference to be able to recuperate the amount of money the government will lose.

The VAT issue still stands whereby VAT will be reduced to 5% but there are also catches to this benefit as in the fact that the remaining 10% VAT has to be reclaimed after the sale and providing you fulfil the criteria for the rebate.

It was very touch and go with regards to the transfer tax issue with the government being under so much pressure from the EU to lower the country’s deficit within the EU timeframe and with Greece’s situation and the EU on a whole, of course the President is looking at all ways to bring in funds not give away funds.

It is not certain as yet what will happen on this subject however the Presidents opinion is for the proposal to be rejected therefore we are of the opinion whatever will happen will not happen quite as quickly as many would have liked!

PUBLISHED BY A&G KOUZALI LAW OFFICE ON 20TH NOVEMBER 2011.

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