Information

What is the 5% VAT?

• Applies to the first 130 sqm of a new primary residence.
• The portion above 130 sqm is taxed at 19%.
• If the property exceeds 190 sqm, the full property is taxed at 19%.
• Any properties that had submitted their planning permit 31st of October 2023
• Press here for the official VAT calculator 

Who qualifies?

• The property must be your main and permanent residence in Cyprus for at least 10 years.
• You must be a natural person (not a company).
• The property must be new (first sale).
• You must apply to the Tax Department before taking possession.
• Both Cypriot and foreign buyers can qualify.

 Price limits:

• Reduced VAT applies up to €350,000 property value.
• For properties priced between €350,001 and €475,000: The reduced VAT rate can still apply, but only on the first €350,000 of the property’s value—and again, only for the part of the property up to 190 square meters.

Other important points:

• Applicants should not have used the reduced VAT in the past 10 years.
• People with disabilities get reduced VAT on the first 190 sqm.

Application process:
To benefit from the 5% VAT, buyers must submit the following online to the Cyprus Tax Department:

• Contract of Sale (signed and stamped).
• Passport / ID copy
• Signed and scanned declaration from the architect/civil engineer
• Signed and scanned declaration from the Building Contractor
• Proof of payment to the Developer/Building Contractor
• Annual Contractor License for the construction period of the project
• Marriage certificate (if applicable)
• Planning / Building Permits and their applications
• Certificate of Buildable Area from the competent authority
• Signed and scanned declaration from the other applicant(s)

The process typically takes a few weeks and approval can be obtain during the construction of the property. It must be obtained before taking possession of the property.