Cyprus Property VAT Changes in 2026

From 16 June 2026, the rules for the 5% VAT discount on new homes in Cyprus will become much stricter. If you are buying a primary residence, here is the "simple" version of what you need to know.

The 5% VAT "Safe Zone"

To get the full 5% discount on your new home, it must meet both of these limits:

  1. Size: Up to 130 sq.m. (covered area).
  2. Price: Up to €350,000.

The "Mixed Zone" (Pay 5% + 19%)

If your home is slightly larger or more expensive, you can still get a partial discount, but only if you stay under these "ceilings":

  • Maximum Size: 190 sq.m.
  • Maximum Price: €475,000
  • The Math: You pay 5% VAT on the first 130 sq.m. (up to €350k value) and 19% VAT on everything above that.

The "19% Zone" (No Discount)

If your home exceeds either 190 sq.m. or €475,000, the 5% rate is cancelled entirely. You must pay the full 19% VAT on the whole purchase price.

4 Rules to Remember

  1. The 10-Year Commitment: You must live in the house as your main home for 10 years. If you rent it out or sell it early, you have to pay back the VAT savings to the government.
  2. No More Stamp Duty: As of 1 January 2026, Stamp Duty has been abolished. You no longer need to pay this fee when signing your contract.
  3. One Property Only: You can only use this 5% VAT benefit once (unless 10 years have passed since your last purchase and you have moved).
  4. Exceptions: People with disabilities qualify for the 5% rate on a larger area (up to 190 sq.m.), and large families (4+ children) get extra square footage allowances.