The Cyprus Parliament has passed a law enabling beneficiaries to apply for a reduced Value Added Tax (VAT) rate of 5% within one year of acquiring a residence. This decision was supported by 34 MPs, with only one opposing.

The law was enacted following a proposal by the AKEL party, aiming to amend the VAT Law. This amendment grants the Commissioner of Taxation the authority to accept a sworn declaration from eligible individuals, allowing them to benefit from the reduced VAT rate on the purchase or construction of a residence within twelve months of acquisition.

AKEL MP Andreas Pasiourtides highlighted that due to various uncontrollable factors, such as health issues or being abroad, some beneficiaries submit their applications late. This new provision allows them a 12-month window to apply and benefit from the reduced rate.

DIKO MP Chrysis Pantelides praised the bill, noting its timely introduction six months after the 5% VAT measure was legally regulated. He remarked that the market continues to function smoothly, contrary to some concerns that had been raised.

Stavros Papadouris, MP from the Green Party, welcomed AKEL's amendment, which he supported. He also noted that while the law will address many situations, the Commissioner of Taxation must retain the sensitivity and flexibility to accommodate exceptional cases.