In short: The first sale of a new-build home in Cyprus carries 19% VAT, but a buyer who will live there as a main residence can pay 5% on the first 130 m² and the first €350,000, as long as the home is no larger than 190 m² and the total value is no more than €475,000. Resale homes carry no VAT and pay Land Registry transfer fees instead, because the two never apply together. An older 5% scheme for projects with planning applications filed by 31 October 2023 ends on 31 December 2026 at the latest.
VAT is one of the most commonly misunderstood costs in a Cyprus property purchase, partly because the rate depends on the buyer's circumstances, not just the property.
Standard rate: New residential property is generally subject to the standard VAT rate, charged on top of the agreed price unless a reduced rate applies.
Reduced rate for a main home: Buyers purchasing a new home as their main and permanent residence in Cyprus may qualify for a reduced VAT rate on the first portion of the property's covered area (with the standard rate applying above that threshold), subject to meeting eligibility conditions and submitting the right application before delivery of the property.
Resale property: Older resale properties that have already been subject to VAT, or that fall outside the VAT system, are typically subject to transfer fees at the Land Registry instead of VAT.
This is general information, not tax advice — always confirm your specific VAT position with a Cyprus accountant or lawyer before signing a contract.