Changes on the applicable VAT rate relating to primary residence
in Cyprus were introduced in June 2023 with Law 42(I)/2023 and in
April 2024 with Law 55(I)/2024.
Specifically, Law 42(I)/2023 amends the conditions for applying
the reduced VAT rate of 5% to the acquisition or construction of
new residences. The revised conditions are as below:
- The reduced rate is applicable to the first 130 square meters
of the buildable area of the residence.
- The total cost of the residence must not exceed
€350,000.
- The residence must not surpass 190 square meters of buildable
area or have a total cost exceeding €475,000.
In cases which the buildable area exceeds 190 square meters or
the total value of the residence exceeds €475,000, the
standard rate of 19% is applicable on the purchase price or
construction value of the residence.
