Cyprus MPs have released plans to draft a bill aiming to remove bias within the Cyprus courts whereby some purchasers of real estate within the Republic are subject to property transfer fees while others seem to be exempt.
The reasoning for the convoluted laws is due to VAT payment, so when an individual purchases a Cyprus property which is subject to VAT, they are not required to pay transfer fees; however transfer fees are applicable when the sale agreement includes a lease of land.
The proposal is set to update existing legislation and inequality by eliminating the requirement to pay transfer fees on registered leases where VAT has already been settled. The legislation bias in the current market is deterring investors and unfavorably impacting competition on the island, experts have warned.
Additionally, the government is also intending to bring an amendment to the law recently passed imposing 19% VAT on building land; currently, when an individual purchases a housing unit or apartment as their primary residence, an amount of 5% VAT is payable, however when a plot of land is purchased for owner-occupied housing, this acquires a charge of 19% VAT.
Government Officials have also said they will be clarifying the current ambiguities within the real estate market with a bill relieving the 19% VAT payment for young couples in the Republic who purchase land for building a primary residence on.
If you think you have wrongly paid transfer fees on a recent property purchase in Cyprus, contact us, we have land law solicitors on hand to assist you.