The Cyprus Tax Department has announced updated rules on the
reduced 5% VAT rate for the purchase or construction of primary
residences, effective 24 June 2025. These changes affect both
Cypriot and foreign buyers, introducing stricter conditions on
eligibility and repayment, and impacting anyone planning to acquire
a home in Cyprus.
New 5% VAT Eligibility Rules
The reduced 5% VAT applies to individuals over 18—whether
Cypriot citizens or foreign nationals—who acquire a property
to use as their primary and permanent residence in Cyprus for at
least ten years. Importantly, the residence must be occupied by the
owner themselves; properties used for investment or rental purposes
do not qualify for the reduced VAT rate.
