5% VAT on the purchase or construction of a new residence
The area (130 m² / 190 m²) and value (€350,000 / €475,000) thresholds for the reduced 5% VAT rate on a main and permanent residence.
Published on 29 October 2024. Rates, thresholds and deadlines may have changed since then (including under the 2026 tax reform). Please contact us for the current position.
On 8 June 2023 the Cyprus Parliament approved new legislation on the application of the 5% VAT rate to the purchase or construction of a building to be used by individuals as their main and permanent residence.
1st condition – 130 m² threshold
- For apartments/houses up to 130 m², a reduced VAT rate of 5% applies.
- For apartments/houses over 130 m² and up to 190 m², VAT of 19% applies to the square metres exceeding 130 m².
- For apartments/houses over 190 m², VAT of 19% applies to the whole value.
2nd condition – €350,000 threshold
- For apartments/houses with a value up to €350,000, VAT of 5% applies.
- For a value over €350,000 and up to €475,000, VAT of 19% applies to the amount exceeding €350,000.
- For a value over €475,000, VAT of 19% applies to the whole value.
At ACLA Auditors, we can assist you with the preparation and submission of all the documentation and procedures required to apply for the 5% reduced VAT certificate.
This publication is general information as at the date shown. It is not tax, legal or audit advice for your particular situation. Rules change — please contact us before acting on it.
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