What is the VAT rate for New Houses/Apartments in Cyprus? Reduced VAT Rate Vs Standard VAT Rate

The VAT policy of Houses/Apartments is currently under an approval process from the EU. (*New VAT Policy)
The Reduced VAT policy from 19% to 5% will apply to the first 130 sq. m on the main residence and up to a value of €350,000, provided that the total value of the transaction does not exceed €475,000 and that the total buildable area does not exceed 190 sq. m.

The law also provides for a transitional period, so that the new rules do not apply in cases where a planning permit has been issued already before 31st of October 2023 or where an application for a planning permit has been filed by 31st of October 2023. 

It is worth to note that the main requirement is that owners must have an intention to live in for at least 10 years and that the applicant must not have another property that is used as a permanent residence in Cyprus. 

**Previous VAT policy (Relevant for projects/properties that obtained a planning permit prior to the implementation of the new policy)

The reduced rate of 5% applies for the first net 200 square meters of the residence and without any price limit. In the event that families have more than 3 children, the permissible total covered area increases by 15 square meters for each additional child. (i.e. beyond the three children). For the remaining size of the house, the standard rate of VAT 19% is been applied. 

To find out what VAT rate you should expect to pay given your own circumstances, please feel free to contact us; so to customise the calculation for you, where possible.