Cyprus Property VAT from 1 September 2026: When Is a Property Considered New?

From 1 September 2026, Cyprus introduced changes to the rules determining whether a property is considered new for VAT purposes. The key factor is no longer the date of construction completion but the length of time the building has actually been used.

The new rules were introduced under Regulatory Administrative Act (RAA) 103/2026, which amends the Eighth Schedule of the Cyprus VAT Law No. 95(I)/2000.

What Changed on 1 September 2026?

Before 1 September 2026, two main criteria were considered when determining a building’s VAT status: the five-year period following construction completion and the requirement that the property had been used by a person unrelated to the owner for at least 24 months.

From 1 September 2026, the five-year criterion was abolished. The decisive factor is now the property’s actual use. For a building to no longer be considered new for VAT purposes, it must have been systematically used or occupied for at least 18 months.

As a result, even a property built many years ago may still be classified as new if it has not been used for the required period.

The 18-Month Rule: When Is a Property Considered New?

Under the updated legislation, determining a property’s VAT status requires establishing whether the building has been systematically used for at least 18 months following construction completion or handover.

Qualifying use may include:

• permanent occupation by the owner;
• renting out an apartment or house;
• use of the property by the owner for relevant purposes.

However, the completion of construction, receipt of keys or presence of furniture does not, in itself, mean that the required period of use has been satisfied.

If a property has not been systematically used for 18 months, its sale may still be subject to VAT, even several years after construction was completed.

Examples of VAT Treatment When Buying an Apartment or House in Cyprus

These examples illustrate the 18-month rule. The final VAT treatment depends on all the circumstances of the individual transaction.

Can Buyers Qualify for the Reduced 5% VAT Rate?

The new rules do not remove the possibility of applying the reduced 5% VAT rate when purchasing a primary residence in Cyprus.

Even if a property is classified as new and its sale is subject to VAT, the buyer may qualify for a reduced rate of 5% instead of the standard 19%.

To benefit from this reduction, buyers must meet the relevant legal requirements, including restrictions relating to the property’s size and value, as well as conditions governing its use as a residence.

What Do the New Rules Mean for Buyers and Investors?

The changes are particularly important for those considering purchasing a completed apartment from a developer, acquiring an investment property or reselling real estate in the future.

Previously, buyers could largely rely on the time elapsed since construction was completed. This is no longer sufficient.

For example, a completed apartment that has remained unsold and unused for several years may still be subject to VAT. This can affect the overall purchase budget and the potential return on investment.

For sellers and property developers, the new rules also highlight the importance of accurately documenting when a property was first put into use.

Get a Consultation

If you are planning to buy or sell property in Cyprus, contact us for a consultation. We can help you determine whether a property is subject to VAT, understand the eligibility requirements for the reduced 5% VAT rate, calculate taxes and additional transaction costs, and review property documentation and legal matters.

Our specialists provide professional support throughout every stage of the buying or selling process, helping ensure a transparent and secure transaction.

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