Cyprus made preferential VAT on real estate purchases more affordable

According to the law changes, when buying a small-space property in Cyprus it is possible to save on taxes. The new owner can pay 5% value added tax instead of 19%. Previously, the exemption included properties of up to 150 sqm, but the parliament has decided to extend this limit to 190 sqm.

Houses for sale in Cyprus 3,248 listings on Tranio

From 395,000 €

Complex of villas with swimming pools and gardens near the beaches, Paphos, Cyprus

64 units in total

From 660,000 €

New complex of villas on the first sea line, Paphos, Cyprus

67 units in total

From 1,315,000 €

Large residence with golf courses, a spa center and an equestrian club on the nature reserve, Paphos, Cyprus

Built in 2020 300 units in total

From 328,000 €

Luxury apartments and villas in a gated residence with swimming pools, Chloraka, Cyprus

320 units in total

From 315,000 €

New residence close to the beach and the airport, Mandria, Paphos, Cyprus

47 units in total

From 2,080,000 €

New villa with a swimming pool and a panoramic view, Armou, Cyprus

1 unit in total

From 1,200,000 €

Complex of luxury villas near the sea, Paphos, Cyprus

10 units in total

From 260,000 €

Apartments and villas in a gated community with sea and city views, Limassol, Cyprus

81 units in total

However, the change could cause tensions with the European Union, as the general directive only provides for VAT reduction for properties up to 150 square metres.

Many officials have expressed support for extending the size criteria to comply with the Cyprian standard of enlarged living spaces, while the finance ministry has urged that the EU directive be adopted before the stipulated deadline.

According to the Cyprus Ministry of Finance, 52% of residential property transactions were subjected to 5% VAT in 2021.

Source: Cyprus Property News

Author: Julia Naymushina