<\/p>\n
As of 2026, Cyprus continues to apply updated rules for the reduced 5% VAT rate on the purchase of a first residence. While this preferential regime previously applied broadly to most first-time homes, the conditions have now become significantly stricter and are primarily focused on smaller and more affordable properties.<\/p>\n
Previously, the 5% VAT rate could be applied to almost any first residence covering up to 200 m\u00b2, without strict price limitations. Today, both size and price thresholds have been introduced.<\/p>\n
The reduced VAT rate now applies only to properties up to 190 m\u00b2.<\/p>\n
If the property exceeds 191 m\u00b2, the standard VAT rate of 19% is applied to the entire purchase price.<\/p>\n
Previously, the reduced rate applied to the first 200 m\u00b2 of a property. Now, it applies only to the first 130 m\u00b2.<\/p>\n
New rules also introduce a value cap:<\/p>\n
For properties where the Planning Permit application was submitted before 31 October 2023, the previous VAT regime still applies.<\/p>\n
This is particularly relevant for buyers who had already started the purchase process before the legislative changes.<\/p>\n
Due to administrative delays, Cyprus has extended the deadlines for submitting applications for the reduced VAT rate.<\/p>\n
From September 2026, additional rules will define when a property is considered \u201cnew\u201d.<\/p>\n
A property is treated as new (and subject to 19% VAT) until it has been occupied or used for business purposes for at least 18 months.<\/p>\n
In addition, the 5% VAT rate on renovation works will only be available three years after the first official occupation of the property.<\/p>\n
If you are planning to purchase property in Cyprus and want to understand whether you qualify for the 5% VAT rate, it is important to assess your case in advance based on the property\u2019s parameters and application timelines.<\/p>\n
For consultations regarding the application of the 5% VAT rate and to check your eligibility, please contact us at taxadvisory@mainpartnertrust.com<\/a>.<\/p>\n \n Note: The content of this article is relevant at the time of its first publication. It is intended to provide general information on the topic and does not constitute legal advice. We recommend seeking professional advice regarding your specific matter before taking action based on the information presented. For more information or consultation, please contact our tax experts by email at\u00a0<\/span><\/i>contact@mainpartnertrust.com<\/span><\/i><\/a><\/p>\n See more at\u00a0<\/em>Instagram<\/em><\/a>,\u00a0<\/em>https:\/\/t.me\/mainpartnertrust<\/em><\/a>\u00a0\u00a0<\/em><\/p>","protected":false},"excerpt":{"rendered":" As of 2026, Cyprus continues to apply updated rules for the reduced 5% VAT rate on the purchase of a first residence. While this preferential regime previously applied broadly to most first-time homes, the conditions have now become significantly stricter and are primarily focused on smaller and more affordable properties. What has changed? Previously, the […]<\/p>\n","protected":false},"author":3,"featured_media":2369,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,3,4],"tags":[],"class_list":["post-2368","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","category-media","category-news"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t