VAT

Since 1/5/04 a new statute in respect of VAT on properties has been introduced. Disposals of newly-constructed properties for which a proper application for planning permit has been submitted with the relevant authorities after 1/5/04 are subject to VAT at standard rate.

Under certain conditions, a grant is given to entitled persons for the purchase of newly-constructed properties that are used as the main permanent residence.

The application for the grant is submitted to the Ministry of Finance by any physical person citizen of the Republic of Cyprus or of any other EU member state who resides permanently in the Republic of Cyprus. The grant is for properties whose total covered area does not exceed 250 m2 and is restricted to 130 m2. For more details you may contact a local accountant.

Tax Advantages

Cyprus is unique when it comes to the taxation aspects of living on the island.

The following income tax rates apply to individuals:

Retirees who become residents in Cyprus are taxed on their pensions from abroad at the rate of 5% per annum while an annual exception for the first L2.000 is granted.

Additionally, Cyprus has established Double Taxation treaties with the majority of European and non-European countries, safe-guarding that its residents will avoid paying tax in both countries. This gives the option to the citizens of these countries to take advantage of the very low rates in Cyprus.