VAT on property in Cyprus: when you pay 5% and when you pay 19%
Almost everyone who searches for Cyprus VAT is really asking one question: will this apartment be charged at 5% or at 19%. The answer depends on four numbers, two of which behave completely differently when you cross them.
By Evdokiia Petrovskaia, Director, Dubir GroupFigures checked
Short version: new-build is 19%. A first and main residence gets 5% on the first 130 m² of buildable area, up to €350,000 of value, as long as the whole property is no more than 190 m² and €475,000. The inner pair are soft limits that split the price into two rates. The outer pair are hard: cross one and the entire property goes to 19%.
The four numbers
| Limit | Value | What crossing it does |
|---|---|---|
| Reduced-rate area | 130 m² buildable | Area above it is charged at 19% |
| Reduced-rate value | €350,000 | Value above it is charged at 19% |
| Maximum total area | 190 m² buildable | Reduced rate lost entirely |
| Maximum total value | €475,000 | Reduced rate lost entirely |
Three worked cases
A 110 m² apartment at €300,000
Inside every limit. The whole €300,000 is charged at 5%, so €15,000 of VAT rather than the €57,000 the standard rate would take. The relief is worth €42,000.
A 160 m² house at €420,000
Both outer limits are respected. 160 m² is under 190, €420,000 is under €475,000, so the reduced rate survives, and the price splits. The portion attributable to the first 130 m², capped at €350,000, is charged at 5%; the rest at 19%. Working from area, roughly 81% of the property sits in the reduced band. The exact split is agreed with the Tax Department on the specific property, and this is the point where a Cyprus accountant earns their fee.
A 200 m² villa at €600,000
Over both outer limits. There is no partial relief: the entire €600,000 is charged at 19%, which is €114,000 of VAT. Note how much the last square metre costs. Going from 190 m² to 200 m² adds €49,000 of tax to a property in this range. If a design is close to the line, moving it back under is usually the single most valuable change available.
Resale property is a different tax
VAT applies to the first supply of a new building. Resale property generally falls outside VAT altogether and pays transfer fees instead, which are calculated on a different basis and at different rates. Comparing a new-build price against a resale price without adjusting for this compares two different things.
Buying to let, or through a company
The 5% rate is a first-and-main-residence relief. Buy to let and it does not apply; claim it and then let the property out and you are exposed to repayment. Claiming it again within ten years generally means repaying the earlier benefit pro-rated for the time you lived there.
The rest of the Cyprus VAT system
Property is the case people arrive looking for, but the same rates run through everything else: 19% standard, 9% on hotels, restaurants and local sea transport, 5% on foodstuffs, pharmaceuticals and books, 3% on a short super-reduced list, and zero on exports and intra-Community supplies. A temporary zero rate on essential goods runs to 31 December 2026 and has been renewed by decree every year since 2023. Treat it as a measure with an expiry date, not a permanent rate.
The general VAT registration threshold is €15,600 of taxable supplies in any twelve-month period, or where you expect to exceed it within the next 30 days.
To add or strip VAT at any of these rates, use the Cyprus VAT calculator.
Questions, answered
How much VAT do I pay on a new home in Cyprus?
19% as standard. A first and main residence qualifies for 5% on the first 130 m² of buildable area up to €350,000 of value, provided the total transaction value is at most €475,000 and the total buildable area at most 190 m². Anything above those inner limits is charged at 19%.
What happens if my property is bigger than 130 m²?
You do not lose the reduced rate, you just stop extending it. The first 130 m² is charged at 5% and the area above it at 19%, as long as the whole property stays within 190 m² and €475,000. Cross either of those outer limits and the reduced rate is lost on the entire property, not just on the excess.
Do I pay VAT on a resale property in Cyprus?
Normally no. Resale property generally falls outside VAT and attracts transfer fees instead. VAT applies to new-build property where the application for planning permission was submitted after 1 May 2004, and to the first supply of a building.
Can I claim the 5% rate twice?
Only under conditions. The relief is for a first and main residence, and claiming it again within ten years generally requires repaying the benefit on the earlier property, pro-rated for the time you occupied it. It is designed for people housing themselves, not for a portfolio.
Is the 5% rate available to non-residents and non-EU buyers?
Yes, subject to the same conditions. The test is that the property is your main residence in Cyprus and that you occupy it, not your nationality. You are expected to actually live in it, and the Tax Department can ask.
Does VAT apply to the land as well as the building?
Since 2018 the sale of undeveloped buildable land in the course of business is subject to 19% VAT. Land sold by a private individual outside a business activity is generally outside the scope.
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