The rule today
The reduced 5 percent rate applies to the first 130 square metres of a primary residence with a value up to €350,000, on properties up to 190 square metres and €475,000 in total. Above those limits the standard 19 percent applies to the whole property.
The property must be the buyer’s main residence in Cyprus for at least ten years. Non-EU buyers qualify on the same terms.
How to apply
The application goes to the Tax Department before delivery of the property, with the sale contract, architectural plans and a declaration of use. Approval usually takes four to eight weeks.
Developers will not invoice at 5 percent without the approval in hand, so start early.
Interaction with residency
A fast-track permanent residency application requires a new-build of €300,000 plus VAT. At 5 percent that is €315,000; at 19 percent it is €357,000. Qualifying for the reduced rate lowers the all-in cost of the residency route materially.
We model both figures on every eligible listing.
