Cyprus Property CostVAT on Cyprus property
VAT is charged on new builds bought from a developer. It is not charged on resales. On a primary residence part of the price can attract a reduced rate, but two hard caps can remove that relief altogether.
Who pays it
VAT applies to the first sale of a new building. If you are buying from a private owner rather than a developer, this page probably does not apply to you and you should read the transfer fees page instead.
The standard and reduced rates
The standard rate is 19%. Where the property will be your primary and permanent residence in Cyprus, a reduced rate of 5% applies to the first 130 m² of covered area and the first €350,000 of value. The rest of the price attracts the standard rate.
The relief is proportional, not a discount on the whole bill. The eligible amount is the share of the value that corresponds to the eligible area, and only that share gets the reduced rate.
The two caps that remove the relief entirely
If the covered area exceeds 190 m², or the price exceeds €475,000, the reduced rate does not apply to any part of the purchase. The standard rate applies to the whole price. This is all-or-nothing, not tapered.
This is the single most misunderstood rule in the market. A property a few square metres or a few thousand euros over a cap costs materially more in VAT than one just under it, and the difference is far larger than the difference in price.
Covered area is not brochure area
The figure that matters is the covered or buildable area on the approved architectural plans. Marketing material frequently quotes a different number, sometimes excluding covered verandas, storage or parking. Ask the developer for the planning figure in writing before you rely on any calculation, including ours.
Staying eligible after you buy
The reduced rate is granted on the basis that the property is your primary and permanent residence. If that ceases within 10 years, the difference between the two rates can be clawed back for the remaining period. Claiming the relief once also affects a future claim on another property.
The transitional regime
An earlier regime applied the reduced rate to the first 200 m² with no value cap. It remains relevant only for a narrow set of planning-delay cases, extended to 2026-12-31. Its scope is contested. This calculator does not compute it. If your planning permit application was filed on or before 2023-10-31, ask your advocate whether you fall inside it.
What we cite
Current regime: Law 42(I)/2023. Transitional extension: Law 109(I)/2026.
This is an estimate for general information. It is not legal, tax or financial advice. Confirm every figure with a qualified Cypriot advocate and the Tax Department before signing anything.