VAT on property in Cyprus: the 5% main-home rate, 19% and resales

VAT on property in Cyprus applies to the first sale of a new building before it is used, at 19%. A used home sold by its owner carries no VAT; the buyer pays the Land Registry transfer fee instead. If you buy or build a home to live in as your main and permanent residence, you can pay 5% on the first 130 m² of buildable area and the first €350,000 of value, as long as the whole home costs no more than €475,000 and has no more than 190 m². The rest is taxed at 19%; above either limit, all of it is. You apply for a Reduced Rate VAT Certificate from the Tax Department through Tax For All before you take possession, and the home must stay your main residence for 10 years. When VAT is paid on the purchase, no transfer fee is due.

Buildings are generally exempt from VAT. The exception is the first delivery of a new building before it is used, which is taxed at 19% unless a reduced rate applies. A later sale within five years of completion can also be taxed if no unrelated person has used the building for at least 24 months. PwC notes that from 1 September 2026 'first occupation' means systematic use for at least 18 months.

In practice: buying from a developer means VAT; buying a used home from its owner means no VAT, and you pay the Land Registry transfer fee instead. Building land sold in the course of business has carried VAT since 2 January 2018; land not meant for development, such as agricultural or protected land, does not.

Before you sign with a developer, check whether the contract price includes VAT and at which rate it was calculated. If the price assumes 5%, the contract should say what happens if the reduced-rate certificate is refused, because the difference up to 19% may then be charged to you.

Since the 2023 reform, an individual who buys or builds a home to live in as their main and permanent residence pays 5% on:

• the first 130 m² of buildable area,
• up to €350,000 of value,
• provided the whole transaction is no more than €475,000 and the total buildable area is no more than 190 m².

The rest of the price is taxed at 19%. If the home is larger than 190 m² or costs more than €475,000, the whole price is taxed at 19%. People with disabilities can apply 5% to the first 190 m², whatever the total area.

Example: a 110 m² new flat at €300,000 within the limits carries 5% VAT, €15,000, against €57,000 at 19%. For a larger or more expensive home, ask your lawyer to work out the split, or use the home purchase costs calculator.

A new apartment costs €400,000, has 150 m² of buildable area and will be your main home. It is within the €475,000 and 190 m² limits, so the reduced rate applies to part of it. The figures match the home purchase costs calculator.

• Share for the first 130 m²: €400,000 × 130 ÷ 150 = €346,666.67. That is below €350,000, so all of it takes the reduced rate.
• 5% × €346,666.67 = €17,333.33.
• 19% on the rest, €53,333.33 = €10,133.33.
• Total VAT: €27,466.67, against €76,000 at the full 19%.

A €300,000 home of 120 m² is wholly within 130 m² and €350,000, so it pays 5% on all of it: €15,000. A €500,000 home is above €475,000 and pays 19% on the whole price: €95,000.

Resale: no VAT, but the buyer pays the Land Registry transfer fee, at half the scale rates: 3% up to €85,000, 5% from €85,001 to €170,000 and 8% above. On a €300,000 resale that is €17,200 on the full scale, halved to €8,600. Stamp duty no longer applies to contracts signed from 1 January 2026.

Building on your own plot: the 5% rate also covers the construction of a main home, within the same area and value limits; you request a Reduced Rate VAT (Construction) Certificate. Buying the plot itself is a separate purchase: if a business sells it as building land, VAT at 19% applies and no transfer fee; if it is sold privately and not in the course of business, there is no VAT and the halved transfer fee applies.

Renovation and repair: works on a private home at least three years old are taxed at 5%, but not materials worth more than 50% of the services. Extensions qualify since 20 August 2020. From 1 September 2026 the home must also have been used for at least 18 months.

Projects whose planning permit was issued or applied for by 31 October 2023 can still use the old rule: 5% on the first 200 m², whatever the price. According to a May 2026 Tax Department announcement summarised by Kinanis, declarations for these projects had to be filed by 15 June 2026 where the building permit was issued by 31 December 2024, and the Tax Commissioner may examine pending declarations until 31 December 2026. If you are buying in such a project, ask the developer for the permit dates and have your lawyer confirm which regime applies before you sign.

1. Before you take possession, request a Reduced Rate VAT (Purchase) Certificate from the Tax Department, or a (Construction) Certificate if you build on your own plot. The Department publishes step-by-step guides; applications are filed online through its Tax For All (TFA) system.
2. Give the developer the approved certificate so the invoice is issued at 5% on the qualifying part.
3. If you miss the timing, the Tax Commissioner may accept a late declaration within 12 months of taking possession, if you show a good reason such as absence from Cyprus or illness (Law 55(I)/2024).

You must use the home as your main residence for 10 years. If you stop earlier, you notify the Tax Commissioner within 30 days and repay the VAT difference for the remaining years; there are exceptions on death or transfer to an eligible adult child. You can use the reduced rate again for a later home.

We file the reduced-rate certificate request and check the VAT position for you; a licensed lawyer acting only for you checks the project's permits and VAT regime and reviews the contract. Read buying property in Cyprus and title deeds and the Land Registry next.