23/04/2026
📰 NEWS - Cyprus Parliament Extends 5% Reduced VAT Rate
Parliament has approved an extension on the reduced 5% VAT rate for the first purchase of a primary residence until the end of 2026. The deadline was originally set to expire in June 2026 after a 3 years transitional period was set in place back in 2023 due to the scheme being deemed too lenient by EU lawmakers.
The new extension comes as a direct response to sluggish municipal departments, where stalled planning and building permits have threatened to push many eligible residents out of the tax relief window entirely.
The crux of this reform lies in a strategic amendment to the national VAT code that effectively buys more time for applicants. By extending the documentation deadline from three years to four, the government is acknowledging that the current pace makes the previous 2023 legal timeline unrealistic. This extra year serves as a vital safety net for buyers whose construction projects have been derailed by permit delays.
Under the current rules, initially set to expire June 2026, the 5% rate applies to the first 200 square meters of a home, provided the planning request was logged between June and October of 2023. This proposed extension bridges the gap until the more restrictive 2027 framework takes over. Now, as the transition period has officially been extended, from January 1, 2027, the 5% benefit will shrink to cover only the first 130 square meters for properties valued under €350,000, while larger homes up to 190 square meters will be subject to the standard 19% rate on any space beyond that initial threshold.
We work closely with the best developers on the island that have stood the test of the time. Contact us today and we will help you source various options that benefit from the reduced VAT rate.
https://www.cyprusresaleproperties.com/Cyprus-Parliament-extends-5%25-Reduced-VAT-rate--news.html
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