Will I pay VAT when selling multiple properties

[espghia]

Hi All. I own some properties and am now trying to sell these (a house and some parcels of land). I have never sold anything before and do not live in Cyprus, nor am I a citizen. I am concerned that I might need to back-pay VAT on whichever property first sells once a subsequent property sells (particularly if the sales occur within months or a few years of each other).

Would it be a safer bet to just add VAT to the selling prices?
Would I just ringfence the funds in a bank account in case VAT was required to be paid?
What happens if the seller pays me the VAT, but the government decides not to levy this - might the buyers seek a return of the VAT?

Thanks in advance.

[Nigel Howarth]

Hi espghia

Unless you bought the house and the land in the name of a company, you shouldn't have to pay any VAT - as resales are not subject to VAT.

However, friends of mine sold a large plot of land ant the Ta Department considered it was a company sale, despite the fact they bought it jointly in their names. They had to pay VAT.

Regards,

[Pantheman]

Hi All. I own some properties and am now trying to sell these (a house and some parcels of land). I have never sold anything before and do not live in Cyprus, nor am I a citizen. I am concerned that I might need to back-pay VAT on whichever property first sells once a subsequent property sells (particularly if the sales occur within months or a few years of each other).

Would it be a safer bet to just add VAT to the selling prices?
Would I just ringfence the funds in a bank account in case VAT was required to be paid?
What happens if the seller pays me the VAT, but the government decides not to levy this - might the buyers seek a return of the VAT?

Thanks in advance.

First things first.

If you bought the house and only paid 5% vat as it was supposed to be your permanent residence, then by law you are required to keep it for a period of 10 years. If you sell it sooner you will required to pay the difference between 5 and 19%.

If you claimed a refund of the vat then the same applies.

Unfortunately (or fortunately for you), the tax department in Cyprus are too stupid to collect this money as the vat people and the tax office are 2 separate entities and they never ask!!!

This is all assuming you paid vat when you bought it.

Now for the land, If it is agricultural, there is no vat required. If residential, then you may sell the first one vat free, but subsequent sales will attract vat that the buyer pays.

Hope that helps

[espghia]

Thank you Nigel and Pantheman for your replies.

The properties were bequeathed to me by elderly relatives prior to their passing. I paid transfer fees etc, but don't recall paying any VAT. The house is a heritage 'listed' property and the land parcels are zoned residential and touristic, but are purely used for agricultural purposes. Does this impact in some way? Apologies for not specifying this from the start.

[Pantheman]

Thank you Nigel and Pantheman for your replies.

The properties were bequeathed to me by elderly relatives prior to their passing. I paid transfer fees etc, but don't recall paying any VAT. The house is a heritage 'listed' property and the land parcels are zoned residential and touristic, but are purely used for agricultural purposes. Does this impact in some way? Apologies for not specifying this from the start.

You would not have paid vat when they came to you. There is no vat to be paid on a residence.

as for the land, the fact that they are used as agricultural bears no relevance. They fall in a residential/touristic zone so vat is applicable and the buyer pays this.

[Pantheman]

Thank you Nigel and Pantheman for your replies.

The properties were bequeathed to me by elderly relatives prior to their passing. I paid transfer fees etc, but don't recall paying any VAT. The house is a heritage 'listed' property and the land parcels are zoned residential and touristic, but are purely used for agricultural purposes. Does this impact in some way? Apologies for not specifying this from the start.

You would not have paid vat when they came to you. There is no vat to be paid on a residence.

as for the land, the fact that they are used as agricultural bears no relevance. They fall in a residential/touristic zone so vat is applicable and the buyer pays this.

[espghia]

Thanks again Pantheman.