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The Value Added Tax (Amendment) Law of 2016, which took effect on 18 November 2016, amends the Value Added Tax Laws of 2000-2015 with regard to the reduced rate of VAT payable on owner-occupied residential property.
The Value Added Tax (Amendment) Law of 2016, which took effect
on 18 November 2016, amends the Value Added Tax Laws of 2000-2015
with regard to the reduced rate of VAT payable on owner-occupied
residential property.
On application to the VAT authorities, a reduced rate of 5 per
cent is available in respect of the first 200 square meters covered
area of buildings that are to be used as the owner's primary
residence for at least 10 years.
Prior to the amendment this reduced rate was available only if
the total covered area was no greater than 275 square meters. This
overall limit has now been removed and the reduced rate is
available on the first 200 square meters of covered area of all
qualifying residential property, irrespective of size, with the
excess over 200 square meters being subject to VAT at the standard
rate.
The amendment also includes provisions allowing persons who have
already benefitted from the reduced rate to re-apply and acquire a
new residence on which the reduced VAT rate will be imposed,
irrespective of whether the 10-year occupation threshold has been
passed.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.