The House of Representatives passed a new bill for discounted VAT on the first 130 square meters of a first home.
In June 2023 and following a reasoned opinion issued by the European Commission, the House of Representatives voted in favour of a new bill stipulating that a reduced 5% Value-Added Tax (VAT) shall apply on the first 130 square meters of a first home up to a total value of €350,000, including residential houses and apartments, provided that the total value of the acquisition does not exceed €475.000 and the total buildable area does not exceed 190 square meters.
Specifically, VAT shall apply gradually; 5% VAT shall apply on first homes with a total area up to 130 square meters and a total value up to €350.000, whereas 19% VAT shall apply on first homes with a total area ranging from 131 square meters to 190 square meters and a total value up to €475.000. On first homes with a total area exceeding 190 square meters and a total value over €475.000, a 19% VAT shall apply in full.
The new legislation shall be effective as from 1st November 2023 and shall not apply in cases where a building permit has been secured or an application for a building permit has already been submitted within four months from the bill’s effective date.
By Tony Kyriakides
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