VAT on property in Cyprus: 5% or 19%

The short answer

• 19% is the standard rate on a new home bought from a developer.
• 5% applies to the first 130 m² and the first €350,000 of a home you will live in as your main residence, as long as the whole home is no larger than 190 m² and costs no more than €475,000.
• No VAT on a resale once the home has been lived in. Land Registry transfer fees apply instead: see the cost of buying property in Cyprus.

Who qualifies for 5% VAT

The reduced rate was narrowed by Law 42(I)/2023, in force since 16 June 2023. For a home whose planning permit was applied for after 31 October 2023, all of the following must hold:

• You are an individual buying or building the home to live in as your main and permanent residence in Cyprus. Cypriots, other EU citizens and non-EU citizens can all apply.
• The home's buildable area is no more than 190 m² and its total value no more than €475,000. Above either limit, the whole price is taxed at 19%.
• Within those limits, 5% covers the first 130 m² and the first €350,000.
• You live there for 10 years. If you stop earlier (you sell it, let it, or claim the rate again for another home), you notify the Tax Commissioner within 30 days and pay back the difference between 5% and 19% for the years remaining.
• You apply through the Tax Department's Tax For All (TFA) portal, the only channel since 27 May 2024. You need a tax identification number first.

Two groups get more room: a buyer with a disability can claim 5% on the first 190 m², and for families with more than three children the area limits rise by 15 m² for each further child. Second homes, holiday homes and homes bought to let pay 19%.

How the 5% and 19% split is calculated

First check the two ceilings: over 190 m² or over €475,000 and the answer is 19% on everything. Below them, the part taxed at 5% is the first €350,000 of the price, scaled down by 130 divided by the area when the home is larger than 130 m². The rest of the price is taxed at 19%.

Resale homes and the 18-month rule (from 1 September 2026)

VAT is charged on the first supply of a new building. Two regulations published on 27 February 2026 (K.D.P. 102/2026 and 103/2026) changed what counts as new, with effect from 1 September 2026:

• A building stays new until it has had at least 18 months of systematic use: lived in by the owner, let, or otherwise used.
• The old five-year cut-off is gone. A home left empty can stay new for VAT purposes indefinitely, so a developer selling an unused unit years after completion still charges VAT.
• Once a home has passed its first occupation, a sale is outside VAT, and the buyer pays Land Registry transfer fees instead.

The same regulations allow a home sold before those 18 months to still qualify for 5% when the buyer meets the other conditions.

Older projects: the 200 m² transitional rule

Projects whose planning permit was applied for or issued by 31 October 2023 could use the old rule: 5% on the first 200 m², with no value limit. Law 109(I)/2026 set the deadline for those declarations at 15 June 2026, and lets the Tax Commissioner examine late cases until 31 December 2026 where the delay was caused by the planning authorities. If you are buying in an older project, ask the developer for the planning and building permit dates before you sign.

Oniro homes and the 5% rate

All ten apartments at Aegea Views in Agios Athanasios, Limassol, qualify for the reduced 5% rate when bought as your main residence, subject to the legal conditions above. The project's planning permit was applied for before 31 October 2023, so the earlier rule applies: 5% on the first 200 m² of a main residence, with no price cap. Each apartment page shows the price on that basis.