Since Cyprus’ accession to the EU in 2004, VAT must be paid when buying a new build property.
In cases where an application for a town permit was filed before the 1st of May 2004, VAT will not be charged. If the town planning application has been filed after the 1st of May 2004, VAT is charged on the sales price at a rate of 19%. Where a reduced rate of VAT (5%) has been introduced for properties purchased by permanent residents of Cyprus, provided that the property will be used as the main residence of the purchaser for a minimum of 10 years.
In case a transaction is not subject to VAT the legislation provides for an exemption of 50% of the transfer fees (where transfer fees apply).
No VAT is charged on the purchase of land.