All new properties for which a proven official application for planning permission was lodged with the relevant authorities before the 1st May 2004 ( the date of the accession of Cyprus to the E.U.) are exempt from VAT.

It follows that permissions lodged after 01.05.2004 carry a vat charge of the standard 15% on the purchase price of the property.

Under certain circumstances and on a case by case basis, subject to the property being the main permanent residence, an application can be submitted to the Ministry of Finance to obtain a grant as a retrospective refund of part of the vat paid.

Clients are encouraged to speak to their accountants on this subject.