Cyprus: Amendments to VAT law relating to real property
Effective September 1, 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