Cyprus' Ministry of Finance has expressed the intention to support before the European Commission, a legislation passed by Parliament which provides for reduced VAT rate of 5% for the first 130 sqm of a primary residence.
In a press release on Thursday, the Ministry commends the fact that the draft legislation received almost unanimous approval, after the deliberations which took place at parliamentary committee level.
Based on these circumstances, it said, "the government will back the final decision of the Parliament before the European Commission, with the aim of securing its acceptance and rectifying a longstanding distortion concerning the socially sensitive issue of home acquisition."
The Ministry furthermore notes that the matter of implementing a reduced 5% VAT rate for the acquisition of primary residences as part of social policy has been the matter of discussion by the Government, the House of Representatives, and society for nearly two years.
It adds that given that Cyprus received a formal notice by the Commission in July 2021, the new Government has prioritised the issue from the outset.
Furthermore, it is highlighted that, through initiatives undertaken by the Ministry of Finance, intensive contacts and consultations have commenced with both the competent European Commission and the Cyprus Parliament, in order to reach a resolution that benefits society and the economy, while always operating within the framework of the specific provisions of the EU directive.
The Ministry of Finance says that it has submitted a specific proposal to the Parliament, which has also garnered the consent of the European Commission. Throughout the parliamentary discussions, it further adds, the government maintained constant communication with the European Commission, and the Ministry of Finance played a constructive intermediary role in order for an outcome to be reached.
Source: Cyprus News Agency