15% VAT on purchase of land

The Cyprus government will impose a 15% VAT on the purchase of land, effective as of 1 July 2008, thus fulfilling its tax obligations towards the EU. The adoption of VAT on the purchase of land is expected to reduce the demand for land (at least in the short-term), while there is a possibility of an increase in demand prior to the adoption (i.e. before 1 July 2008).