VAT on Immovable Property
On 3.11.2017 there have been some changes effected in relation to the VAT legislation with regards immovable property in Cyprus. These changes concern the imposition of the standard 19%VAT rate on:
a. Certain transactions relating to immovable property carried out for business purposes for example the transfer of undeveloped buildable land, which is intended for the construction of a structure(s) within the framework of business activities (effective as from 02.01.2018),
b. Leasing of commercial immovable property to taxable persons within the frame of their business activities but excluding the leasing for the purpose of residential use. In such case the lessor has the right to opt not to charge VAT under some conditions, provided that he will so notify the Tax Commissioner. Such conditions will be published in the Cyprus Official Gazette (effective as from 13.11.2017).
Moreover the reverse charge mechanism is applicable on transactions relating to transfer of property under the process of loan restructuring and also within the context of compulsory transfer to the lender (effective as from 02.01.2018-31.12.2019).