Cyprus VAT Payable on Property

Since Cyprus’ EU accession in 2004, a standard VAT rate of 19% is required to be paid when buying a new property.

However, following a recent VAT Amendment Law, a reduced VAT rate, starting from 5%, is applicable for the acquisition of new residential properties.

For the reduced rate to be in effect, certain terms and conditions must be met:

  • The property must be used as the primary and permanent residence of the applicant (for the next ten years).
  • The applicant has not acquired any other residence in Cyprus with a reduced VAT rate. 
  • The applicant must be an individual, over 18 years old, thus legal entities are excluded. 

The reduced VAT rate of 5% is applied on the first 200 square meters (building coefficient) of the property as per the architectural plans submitted to the Authorities. On the remaining square meters, the standard rate of 19% is imposed.


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