VAT is the largest cost when buying a new build in Cyprus. The standard rate is 19%. The reduced rate is 5%, and on a €400,000 apartment the difference can reach almost €50,000. Here is who qualifies and how to calculate it.
Who can get 5%
All conditions must be met at the same time:
- the buyer is an individual over 18 — Cypriot citizenship or residency is not required;
- the home is new, before first occupation, and will be your main and permanent residence;
- neither you nor your spouse has received 5% on another property in Cyprus in the last 10 years;
- for 10 years the property cannot be sold or rented out — otherwise the difference between 5% and 19% is repaid pro rata for the remaining years.
Property bought to rent out or resell is always 19%. The relief is for your own home only.
Two schemes: transitional and new
| Transitional | New | |
|---|---|---|
| 5% rate | on the first 200 m² | on the first 130 m² and first €350,000 |
| Area limit | none | up to 190 m² |
| Deal value limit | none | up to €475,000 |
| Application deadline | 31.12.2026 | none |
Which scheme applies depends on the project’s permit dates — Planning Permit and Building Permit:
- for projects with a Building Permit issued before 31.12.2024, the transitional scheme closed on 15.06.2026;
- for projects with a Building Permit issued from 01.01.2025, or not yet issued, the last day to apply is 31.12.2026;
- from 01.01.2027 only the new scheme applies.
Worked examples
200 m² villa for €500,000, transitional scheme. 500,000 × 5% = €25,000 instead of €95,000. Saving: €70,000.
255 m² villa for €500,000, transitional scheme. The price is split by area: 200 m² (€392,157) × 5% = €19,608, the remaining 55 m² (€107,843) × 19% = €20,490. Total €40,098 instead of €95,000.
120 m² apartment for €400,000, new scheme. 350,000 × 5% = €17,500, the remaining 50,000 × 19% = €9,500. Total €27,000 instead of €76,000.
200 m² villa for €450,000, new scheme. The area exceeds the 190 m² limit — no relief, 19% on everything: €85,500.
If a property under the new scheme is both larger than 130 m² and more expensive than €350,000, the exact split is set by the tax department in its certificate. Before the deal we calculate using its calculator.
How to get 5%
- Check the Planning Permit and Building Permit dates with the developer — they determine the scheme and deadline.
- Obtain a tax number (TIN) for yourself and your spouse and open a Tax For All account.
- Sign the contract and make the first payment.
- Apply via Tax For All before moving in (under the transitional scheme — by 31.12.2026).
- Receive the tax certificate. Until then the developer invoices at 19%.
Documents: passport, Cypriot residence permit (if any), marriage certificate and spouse’s TIN, sale agreement and proof of payment, Planning Permit and Building Permit (or the application for it), architect’s plans with the built area, developer’s licence.
What this means for buyers from Israel
The relief is tied to permanent residence. If you are buying an apartment as an investment to rent out, budget with 19% VAT. If you are relocating or applying for residency and will live in the property, 5% can save tens of thousands of euros — but the decision must be made before signing the contract.
Indicative calculation: the result depends on the project documents and the tax department’s decision. This is not tax or legal advice. Data as of September 2026.