Filenews 29 May 2023 - by Eleftheria Paizanou
The Republic received a new negative response from the Commission in relation to the Parliament's formula for the construction or purchase of a main residence.
The proposal provides for the imposition of 5% VAT on properties with an area of up to 190 sqm and a value of up to €350,000. Besides, for a property worth up to €475,000 and with an area of 190 sqm for the first €350,000 VAT will be 5% and for the remaining €125,000 VAT will be 19%. In the meantime, for properties over €475,000 and over 190 sqm then they will be taxed from the first sqm and from the first cent at 19%.
The Permanent Secretary of the Ministry of Finance, George Pantelis said that the European Commission disagreed with the new proposal of the Parliament, as it has removed the minimum area of 150 sqm provided for in the previous proposal of the Parliament.
Mr. Panteli said that he insists on the imposition of 5% VAT on the 110.sqm of the property. He also said that the EU will activate the third stage of the process in June.
As he said in the teleconference, the EU said that if the legal framework does not change in June, they will send a second letter to the Republic, which will have to respond within two months. He also said that Cyprus would be referred to the EU court in mid-October.
