MPs in Cyprus are planning to revise Property Transfer Feesand the VAT paid on land sales to eliminate distortions in the Cyprus propertymarket, which they believe is adversely impacting competition.
Lawmakers in Cyprus plan to draft a bill aiming to eliminatea distortion where certain buyers of real estate must pay Property TransferFees while others do not. When a person buys a new property and pays VAT on it,he or she is not subject to Property Transfer Fees, whereas transfer fees doapply when the transaction involves a land lease.
In a relatedissue, the government intends to bring an amendment to the law recently passedimposing 19 per cent VAT on building land.
Currently, when someone buys a finished housing unit orapartment as their primary dwelling they pay 5 per cent VAT, whereas buying aplot of land for owner-occupied housing incurs a 19 per cent VAT charge.
Main opposition Akel said the law as it stands isdysfunctional and rife with ambiguities, leading to confusion in the realestate market.
Diko MP Angelos Votsis said the government will be submittinga bill exempting from payment of 19 per cent VAT young couples who buy land forthe purpose of building a primary residence.