Reduced VAT of 5% on the purchase of first homes
On the 8th of June 2023, the Parliament approved a legislation allowing the imposition of a reduced VAT rate of 5% for the first purchase of a home residence, which is applicable to detached houses and apartments.
The basic legislation is amended so that the reduced rate of (VAT), amounting to 5%, imposed upon the delivery or construction of a residence, covers the first 130 sq.m. of buildable residential area, worth up to €350.000 and provided that the total value of the transaction does not exceed €475.000 and the total buildable area is 190 sq.m.
The law approved by the Parliament also covers of person with disabilities where is such case the reduced VAT rate (5%) is applied for the first 190 sq.m. of buildable residential area.
Anything beyond the above criteria, the normal rate of VAT is applied which is set at 19%.
A transitional period is still foreseen, so that the proposed regulations will not be applied, in cases where a planning permit has been secured or an application has been submitted to secure a planning permit within four months of the entry into force of the proposed legislation.
For more information regarding property law and the new law of reduced VAT, feel free to contact our firm and get in touch with one of their lawyers. Seeking help when it comes to property law is the best way to make sure your interests are protected and that all your responsibilities are covered.
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