Reduced VAT

5% VAT Allowance as per VAT Law


The reduced rate of 5% applies for residences which are used or intended to be used as the primary and permanent place of residence.

Granted for:

The purchase of a brand new building or part of it, the sale of which bears VAT. (The application for the planning permit was deposited after 1st May 2004.) The normal VAT rate as from 13/01/2014 is 19%.

Constitutes the main and permanent residence and the applicant does not have another residence in Cyprus, i.e. the residence in question is his main and permanent residency. An official declaration is deposited by the applicant to the VAT Authority.

Documents required:

  • Application with official declaration;
  • Photocopy of passport;
  • Photocopy of marriage certificate;
  • Copy of the stamped Sale Agreement and set of architectural plans;
  • Any other evidence available proving/supporting the fact that the applicant uses the property as his main and permanent residence;
  • True copy of the application submitted to the relevant authority for the issuance of the planning permit duly stamped by that authority;
  • True copy of the planning permit or the building permit.

Who is Entitled:

The applicant should be:

  • Over 18 years of age on the date the application was submitted;
  • Citizen of the Republic of Cyprus or of any other member state of the European Union and non-EU citizen.

This policy has been extended and will remain in force until 31st December 2014.

Important Notes:

  1. The allowance is granted for the first 200 sq. m. of buildings not exceeding 275 sq. m. as per the architectural plans.
  2. The equivalent amount is refundable to the VAT Authority for any part of the ten-year period if the use of the property for permanent residence is interrupted, except in case the property is transferred to the applicant's children over 18 years of age.