07/01/2004 11:04
The Cyprus Finance Ministry decided to maintain its silence with regard to the provisions of the regulation for the imposition of the VAT in the purchase of property. According to StockWatch sources, the governmental proposal has entered the final stage of preparation and will be promoted to the Council of Ministers in mid January.
The final form of the bill will be determined by three basic parameters:
a) The definition criteria of the date of sale and the value of the property
b) The percentage of the VAT
c) Whether the VAT is imposed in new or/and old buildings
The initial thoughts of the Finance Ministry deny the possibility of reducing the VAT ratio to lower social classes, while the VAT will be imposed to the purchase of house, flat, villa building etc.
FinMin
The methodology of the definition of the date of sale and the value of property ‘has puzzled’ the Ministry, the buyers, the sellers and the real estate agents and is expected to be an issue of dispute during the House talks on the bill. At this stage, the Ministry is still not aware whether taxation will be imposed based on the date of issue of the building license or the date of the delivery of the building or even a combination of the two.
“We cannot assure you about anything, everything depends on the criteria that the government will select and the date of the imposition of the VAT”, a source told StockWatch.
“The VAT ratio depends on the methodology to be adopted for the date of sale”, another source said. The value, which is declared on the building license is lower than the final sale price, as it does not include the profit margin of the developer”.
Real estate agents say ‘no’ to additional taxes
The imminent increase of the VAT in property has ‘alarmed’ the real estate agents. “We disagree with the imposition of the VAT in buildings; it is not the proper time for that. The additional taxes will affect negatively the property market”, Chairman of the Cyprus Real Estate Agents Association, Solomon Kourouklides told StockWatch.
The Association supports that the VAT should not be an additional tax and insists on the abolition of certain taxes.
The final form of the bill will be determined by three basic parameters:
a) The definition criteria of the date of sale and the value of the property
b) The percentage of the VAT
c) Whether the VAT is imposed in new or/and old buildings
The initial thoughts of the Finance Ministry deny the possibility of reducing the VAT ratio to lower social classes, while the VAT will be imposed to the purchase of house, flat, villa building etc.
FinMin
The methodology of the definition of the date of sale and the value of property ‘has puzzled’ the Ministry, the buyers, the sellers and the real estate agents and is expected to be an issue of dispute during the House talks on the bill. At this stage, the Ministry is still not aware whether taxation will be imposed based on the date of issue of the building license or the date of the delivery of the building or even a combination of the two.
“We cannot assure you about anything, everything depends on the criteria that the government will select and the date of the imposition of the VAT”, a source told StockWatch.
“The VAT ratio depends on the methodology to be adopted for the date of sale”, another source said. The value, which is declared on the building license is lower than the final sale price, as it does not include the profit margin of the developer”.
Real estate agents say ‘no’ to additional taxes
The imminent increase of the VAT in property has ‘alarmed’ the real estate agents. “We disagree with the imposition of the VAT in buildings; it is not the proper time for that. The additional taxes will affect negatively the property market”, Chairman of the Cyprus Real Estate Agents Association, Solomon Kourouklides told StockWatch.
The Association supports that the VAT should not be an additional tax and insists on the abolition of certain taxes.
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