More than 270 people who benefited from the 5% reduced VAT rate for first home purposes have been found not to be beneficiaries, following checks carried out nationwide by the Tax Department, and will be charged 19% VAT, totalling €16.2 million, Finance Minister Constantinos Petrides announced on Wednesday, following a meeting of the Council of Ministers. He announced on-site checks on other categories of taxpayers and types of taxes.
According to Petridis, from the beginning of October 2022, the Tax Department is conducting a nationwide compliance campaign with on-site checks on houses and apartments to ascertain the correct application of the reduced VAT rate for first home purposes. The campaign is being conducted in the afternoons and weekends, he said.
He noted that the reduced rate, under the existing legislative framework, must be applied only for owner-occupation purposes and not for either rental or other commercial use.
In less than two months, he added, more than 1.700 on-the-spot checks, during which, of the approximately 800 persons identified, 275 were found not to be eligible claimants and, therefore, should be subject to the 19% VAT.
The corresponding amount of additional VAT to be imposed currently amounts to €16.2 million, the Finance Minister said, adding that it is "something that vindicates us for the controls and leaves us very satisfied, but it also demonstrates an abuse of the 5% system."
Mr. Petrides thanked the Tax Commissioner and the officials of the department for the effort they are making and said that not only will these audits continue in 2023 and the next period, but on-site audits will be launched on other categories of taxpayers and types of taxes.
Source: KYPE
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