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Cyprus: Amendments to VAT law relating to real property

Effective September 1, 2026

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March 3, 2026

The Council of Ministers issued new decrees amending the Value Added Tax (VAT) Law (95(I)/2000) that:

  • Revise the provisions determining when the transfer of buildings or parts thereof is subject to VAT (Schedule 8)
  • Introduce harmonized definitions that directly affect the application of reduced VAT rate to residential property (Schedule 5)

Key implications

The amendments are expected to affect:

  • Developers and property owners involved in residential projects
  • Transactions taking place close to the transition date (August–September 2026)
  • Supplies or construction of a primary residence
  • Eligibility for application of the reduced VAT rate when prior use of the property exists
  • Pricing structures, contractual terms, and VAT compliance processes

Both decrees will become effective on September 1, 2026. 

Read a March 2026 report prepared by the KPMG member firm in Cyprus

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