From November 1st, the transitional period for the revised Value Added Tax (VAT) on primary residences will conclude. This change comes after the Parliament's decision, indicating that any urban planning permits issued from the next month will incorporate the newly voted VAT rates.

As clarified by George Pantelis, the General Director of the Ministry of Finance, the 4-month transitional phase, which began on June 8, will end, and the new VAT rates will be implemented from November 1st. The key changes include a reduced VAT rate of 5% applicable to the first 130 square meters of primary residences, including both houses and apartments, for properties valued up to €350,000. This condition holds as long as the total transaction value does not exceed €475,000, and the overall buildable area is under 190 square meters. For sizes between 131 and 190 square meters, a 19% VAT will be imposed. Properties exceeding 190 square meters will be subject to a 19% VAT from the first square meter.

It's important to recall that urban planning permits issued before November 1, 2023, will be subject to the VAT rate previously in place for the last few years, i.e., a 5% VAT for the first 200 square meters without a limit on the total size of the house or apartment.

The new legislation also includes a provision for individuals with disabilities, where the reduced VAT rate of 5% is applicable to the first 190 square meters of buildable residential area.

Meanwhile, according to reports from Brief, the Ministry of Finance has informally received positive feedback from Europe regarding the approval of the amended VAT on primary residences, which is to be implemented from November 1st. An official approval is expected within November.

Originally, the European Commission had approved a 5% VAT only for the first 110 square meters. However, the Parliament decided to extend this limit to 130 square meters, causing concerns at the Ministry of Finance regarding the Commission's potential approval of this amendment.