VAT on property in Cyprus: 5% reduced rate and 19% rate explained

In Cyprus, a reduced 5% VAT rate applies to the purchase or construction of a new primary residence, rather than the standard 19%. Under the current rules, this reduced rate applies to the first 130 m² of the property.

To qualify, the total buildable area must not exceed 190 m² and the total transaction value must not exceed €475,000. Within those limits, the 5% rate applies to the first 130 m² and the first €350,000 of value, and the 19% rate applies to any area or value above those thresholds.

A home with more than 190 m² of buildable area, or a total value above €475,000, is taxed at 19% on the whole purchase. The area limit works differently for a buyer with a disability and for a family with four or more children, set out below.

How much is VAT on property in Cyprus?

In Cyprus, VAT on property depends on the type of transaction. New residential properties carry a standard 19% rate, but buyers of a primary residence qualify for a reduced 5% rate on the first 130 m² (subject to the area and value limits set out below).

Resale properties carry no VAT once the home has had its first occupation. From 1 September 2026 that means at least 18 months of systematic use after it was delivered or built, whether the owner lives in it or lets it.

A home sold before that point is still a new building. Its sale carries VAT when the seller sells it in the course of a business and is, or must be, registered for VAT, as a developer is. A private owner selling their own home outside any business charges no VAT on it.

Undeveloped building land meant for construction, sold in the course of a business, is subject to VAT at 19%.

For a main home with a total value of up to €475,000 and a buildable area of up to 190 m², the 5% rate covers the first 130 m² of buildable area, up to a value of €350,000. Any area or value above that is taxed at 19%.

The current limits came in with Law 42(I)/2023 in June 2023. The old 200 m² rules cover only homes whose planning permit was issued or applied for by 31 October 2023, where the buyer filed the declaration by 15 June 2026.

Cyprus VAT rates in 2026

Transaction type	VAT rate
New residential property (primary residence, first 130 m²)	5%
New residential property (area above 130 m², value above €350,000, or not a main home)	19%
Resale property after 18 months of use	Exempt
Sale of building land in the course of a business	19%
Renovation or repair of a private home, three years after first occupation	5%
Standard rate (goods and services, general)	19%

Reduced VAT rate 5% in 2026

The reduced VAT rate of 5% on a primary residence in Cyprus applies to the first 130 m² of the property and to the first €350,000 of its value. The 19% rate applies to any area or value above those points. The reduced rate is available only when both of these limits are met:

1. The total transaction value is at or below €475,000.
2. The total buildable area is at or below 190 m².

A property above either limit is taxed at 19% on its full price.

The 130 m² and 190 m² figures are the buildable area set by the building coefficient in the planning permit and architectural plans. This is not the covered area shown in some sales brochures, which can count verandas and other spaces. Buyers close to the limits should check the figure on the permit before assuming they qualify.

A buyer with a disability gets the 5% rate on the first 190 m² of buildable area of a main home, whatever its total area, so the 190 m² limit above does not shut them out. The law counts a person certified by the Disability Assessment System with a severe or total disability, or with a moderate intellectual disability. A person approved for public assistance as a disabled person counts too until certified.

For a family with four or more children, the law adds 15 m² to the total area of the home for each child after the third.

The 5% rate is open to individuals aged 18 or over, of any nationality, both EU and non-EU buyers. The applicant does not need to hold a Cyprus residence permit when applying, but the home must be used as their main residence in Cyprus. Companies and other legal entities do not qualify.

A buyer who has already used the 5% rate can use it again for a new main home before the 10 years on the first home are up. There is no need to wait out the 10 years.

The condition is the one in the box above: within 30 days of moving out of the first home, notify the Tax Commissioner and pay the VAT difference for the years left. Nothing is payable where the first home goes to an adult child who qualifies for the 5% rate at the time.

19% VAT on the sale of building land in Cyprus

The standard 19% VAT rate applies to the sale of undeveloped building land intended for the construction of one or more buildings, when the seller sells it in the course of a business. The rule has applied since 2 January 2018, under an amendment to the VAT Law 95(I)/2000. The Council of Ministers can set out by regulations which plots count as building land.

The two conditions that trigger 19% VAT on a land sale are:

• The land is undeveloped building land, meant for construction.
• The seller sells it in the course of a business, as a taxable person.

Sales of bare agricultural land, or land without development potential, remain VAT-exempt. Private individuals selling land they have held for the long term (outside any business activity) are not subject to VAT on the transaction, though this depends on the specific circumstances and the Tax Department's characterisation of the activity.

If you are buying or selling building land in Cyprus, a property lawyer can check whether VAT applies before you sign.

The old 200 m² rules and the June 2026 deadline

Law 42(I)/2023, published in the Official Gazette on 16 June 2023, brought in the current limits. Before it, the 5% rate covered the first 200 m² of a main home, with no cap on the total area or the value.

Article 63 of the VAT Law kept the old rules for buildings whose planning permit was issued or applied for by 31 October 2023. The buyer had to file the declaration within three years of the 2023 law, so by 15 June 2026. That window has closed.

Law 109(I)/2026, published in the Official Gazette (No. 5089) on 24 April 2026, added one exception. Until 31 December 2026 the Tax Commissioner can go on examining declarations filed in time under Article 63 whose examination was held up by delays at the planning authorities. A declaration filed after 15 June 2026 falls under the current rules.

How to apply for the 5% rate

You file the declaration for the 5% rate online, through the Tax For All (TFA) portal. Paper declarations have not been accepted since 27 May 2024. You collect the reduced rate certificate in TFA, and the seller or the contractor charges 5% once you give them a copy.

For a home you buy, you file once the contract of sale is signed and before you take possession. For a home you build, you can file at any stage of the construction.

The Tax Commissioner can accept a late declaration up to 12 months after you take possession, if you prove a good reason for the delay, such as illness or time abroad.

Documents to attach

1. The signed contract of sale, or the construction contract if you are building
2. Evidence of the construction, if you are building
3. Architectural plans of the home: elevations and a floor plan at 1:100
4. The calculation of the home's area, with the architect's or civil engineer's certificate of its buildable area on the Tax Department's form
5. A copy of the planning permit application marked as received by the planning authority, or of the building permit application where no planning permit is needed
6. The contractor's declaration, on the Tax Department's form, that the contractor holds the annual licence for that class and category of work
7. For a married applicant whose spouse is not applying jointly, the spouse's declaration on the Tax Department's form that he or she owns no other home in Cyprus used as a main residence
8. For a joint application, the co-applicant's declaration on the Tax Department's form
9. Proof that you live in the home, such as electricity, water, telephone or municipal tax bills, filed within 12 months of taking possession
10. Any other document the Tax Department asks for during its examination