The short answer
New-build residential property in Cyprus carries 19% VAT. A reduced 5% rate applies to the first 130 m² of a qualifying primary and permanent residence, subject to area and value conditions. Resale property and land in most cases carry no VAT, but attract transfer fees instead.
Key points
- 19% is the standard rate on new-build residential property.
- 5% applies to the first 130 m² of a qualifying primary and permanent home; the balance is charged at 19%.
- The reduced rate must be applied for through the Tax Department, with conditions on use and prior claims.
- Where VAT is paid, Land Registry transfer fees are waived.
Which rate applies to you
The question is not the property type in isolation — it is the combination of what is being sold and how you will use it.
- New-build home you will live in as your main residence — 5% on the qualifying first 130 m², 19% on the rest, subject to conditions.
- New-build home as a second home, holiday home or rental investment — 19% throughout.
- Resale property — generally no VAT; transfer fees of 3–8% apply instead.
- Building land sold by a taxable person — 19% may apply; your lawyer will confirm for the specific plot.
A worked example
Take a 143 m² new-build family home bought as a primary and permanent residence. The reduced rate applies to the first 130 m² of buildable area and the standard rate to the remaining 13 m². The mix — not the headline rate — is what lands on the invoice, which is why the reduced rate is worth confirming early in the process rather than at contract.
Our VAT calculator lets you enter a price and area and see both scenarios side by side.
Claiming the reduced rate
The relief is applied for through the Cyprus Tax Department with supporting documents about the property and your intended use. Conditions attach: the property must be your primary and permanent residence, area and value thresholds apply, and the relief interacts with any prior claim you have made.
If you cease to use the property as your main residence within the qualifying period, part of the relief can become repayable. Your lawyer will set out the current conditions before you sign.
Frequently asked
No. It is applied for through the Tax Department, with conditions on the property's area, value and use as your primary and permanent residence.
Eligibility turns on the property being your primary and permanent residence in Cyprus rather than on nationality. Buyers relocating to Cyprus frequently qualify; buyers keeping the home as a holiday property do not.
In effect, yes — where VAT has been paid on the property, Land Registry transfer fees are waived.
Next steps
Last reviewed 20 August 2026. General information, not legal or tax advice — always instruct an independent Cyprus-registered lawyer.