Extension of Deadline for Reduced VAT on Primary Residence

Further to an amendment in the VAT legislation on 24 April 2026 and a subsequent announcement by the Cyprus Tax Department, an extension was granted on benefiting from the old VAT regime on primary residences up to 31 December 2026.

For the details of what applies under the old VAT regime on primary residences and the changes introduced by the new regime please refer to our related newsfeed.

Building Permits issued after 1 January 2025

For such cases the Tax Department will accept applications for a reduced VAT rate of 5% submitted by 31 December 2026, given that the following conditions apply:

• a Planning Permit was issued or an application for such a permit was submitted by 31 October 2023; and
• a Building Permit was issued after 1 January 2025 or has not been issued by 31 December 2026.

Building Permits issued by 31 December 2024

For these cases the Tax Department will accept applications for a reduced VAT rate of 5% submitted by 15 June 2026 (i.e. the initial deadline), assuming that:

• the application for a Planning Permit was submitted by 31 October 2023; and
• the Building Permit was issued by 31 December 2024

The applications for a 5% VAT rate on acquisition or construction of a primary residence must be duly completed and submitted through the Tax For All Portal.