Property sales are now subject to 19 percent VAT from five percent, in accordance with EU rules, while municipal taxes have been dropped, meaning a savings of 50 percent for taxpayers, said Finance Minister Haris Georgiades.

The new rules have caused some confusion in the property market, with one Limassol-based developer complaining that any profits in the current slump-hit property market would be even more reduced.

But in comments to the state broadcaster, the finance minister has pointed to the steadily improving economy, and the fact that the state is now running on a balanced budget, meaning more stability and better prospects for businesses - including property companies.

The imposition of 19 percent VAT is mandatory, said the finance minister.