Starting from November 1, 2023, new rules for Value Added Tax (VAT) will be in effect in the Republic of Cyprus when purchasing first properties. As explained by Brief, the Deputy Minister of Finance, the transitional period will end on November 1, which began on June 8 when the parliament approved the new law.
Here’s how the 5% and 19% VAT will be applied:
Until October 31, 2023.
A 5% VAT will be applied to the first 200 square meters when purchasing the first (or “primary”) house or apartment.
From November 1, 2023.
The implementation of the new law requires official approval from the European Commission.
For the purchase of a first house or apartment:
- Up to 130 square meters and a cost of up to 350,000 euros – 5% VAT.
- Up to 190 sq. m and a cost of up to 475,000 euros – 5% VAT for the first 130 sq. m, and 19% for the area from 131 to 190 sq. m.
- More than 190 sq. m – 19% VAT.
There is an exception for people with disabilities. For this group, a 5% VAT will be applied to the first 190 sq. m when purchasing their first property.