What VAT Will You Have to Pay When Buying Your First Home in Cyprus?

Starting from November 1, 2023, new value-added tax (VAT) rates for the purchase of primary real estate came into effect in the Republic of Cyprus.

Changes have affected the tax conditions for the purchase of the first house or apartment; now, VAT rates will depend on the area and cost of the acquired property:

• For areas up to 130 square meters and a cost of up to 350,000 euros, VAT is refundable at a rate of 5%.
• Housing with an area of up to 190 square meters and a cost of up to 475,000 euros: for the first 130 square meters, VAT is charged at a rate of 5%, and from 131 to 190 square meters, the rate is 19%.
• For residential areas exceeding 190 square meters, a 19% VAT rate applies.
• There is an exception for persons with disabilities: for this group, a 5% tax will apply to the first 190 square meters when purchasing their first property.

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What was the previous VAT rate applied to the purchase of the first home?

Before November 1, 2023, the value-added tax was 5% and applied to the first 200 square meters, provided that the purchased property was the first for the owner.

Why did the size of the property purchase VAT change?

The reduced tax rate was temporary and applied during the transitional period. It began on June 8, 2023, when the parliament approved the new law, and ended on the last day of October.