What happens (with my reduced VAT) if I sell the property before the lapse of 10 years and thus don’t use the property for 10 years?
If an eligible person does not use his house (as his main residence) for at least 10 years and thus proceed with a sale or rent prior to the lapse of 10 years, then he is subject to the following procedure.
Within 30 days from the date of termination of such use (owner) must notify the Registrar and pay the difference between the reduced VAT fee (i.e. 5%) and the standard rate of VAT (19%) in relation to the remaining period.
For example a person bought a house at the price of €600,000 by utilizing a reduced VAT rate of 5%. Then he sells the house 3 years later from the initial date of use. Therefore on such case he required to pay the difference (i.e. 14% of VAT) for the remaining 7 years.
That is:
€600,000 x 5% = €30,000
€600,000 x 19% = €114,000
€114,000 – €30,000 = €84,000 (Difference)
€84,000 x 7/10 = €58,800 (what you pay)
*There is an exception in cases of: death or transfer of the dwelling to an adult child of owner.
The information in this section is intended as a guide only and every reasonable effort was made to ensure the accuracy and the timeliness of the information. In no circumstances shall Zyprus be legally bound by any information contained in this section, and shall accept no liability whatsoever in respect of loss caused by reliance on such information.