Amendments to the VAT Treatment of New Immovable Property in Cyprus

New criteria governing the VAT treatment of immovable property in Cyprus came into effect on 1 September 2026, following the introduction of Decree No. 102/2026 and Decree No. 103/2026.

Eighth Schedule – Supply of New Buildings

A building supplied before completing 18 months of systematic use is considered “new” for VAT purposes. Its supply is therefore subject to VAT.

The age of the building alone is no longer the determining factor. What matters is whether and for how long the property has been systematically used.

Fifth Schedule – Reduced VAT Rate and Renovations

The amendments also affect:

• The application of the 5% reduced VAT rate on qualifying residential properties.
• The calculation of the period of use for renovations of private residences.

The reduced VAT rate may apply where the relevant conditions concerning the property and the buyer are satisfied.

Practical Considerations

Property developers, owners, sellers, buyers and investors should maintain sufficient evidence confirming when the property entered into use and the duration of that use. Relevant documentation may include tenancy agreements, utility bills and occupancy records.

Before proceeding with a property transaction, its VAT treatment should be carefully reviewed to avoid unexpected tax liabilities.

How can we help?

For more information or assistance, you can contact us at: 22484429 or [email protected]