In short
- Building land sold in the course of business has carried 19% VAT since 2 January 2018.
- From 1 September 2026 a building counts as used after 18 months of systematic use.
- Main home: 5% on the first 130 m² up to €350,000, within ceilings of 190 m² and €475,000.
- Where VAT was paid on a purchase, the Land Registry charges no transfer fees.
In this guide
When the sale of land and buildings in Cyprus carries VAT
Cyprus exempts the supply of immovable property from VAT and lists the exceptions in the Eighth Schedule of the VAT Law, 95(I) of 2000. The two main ones are buildings transferred before first occupation and building land supplied in the course of an economic activity. Both carry 19%.
| What is sold or let | VAT | Condition |
|---|---|---|
| Building land | 19% | Seller acts in the course of business |
| New building with its plot | 19% | Transferred before first occupation |
| New main home of a person | 5% and 19% | 5% on the first 130 m², up to €350,000 |
| Used building | Exempt | In systematic use for 18 months or more |
| Building with a planning application before 1 May 2004 | Exempt | Used or not |
| Farmland, land in protected zones | Exempt | No permit for a large development |
| A private owner's only plot | None | Outside any economic activity |
| Lease of business premises | 19% | Tenant makes taxable sales |
A company that sells such property registers first: our page on VAT registration in Cyprus gives the threshold, the form and the price.
VAT on building land: the rule in force since 2 January 2018
Until 2018 the sale of land in Cyprus was exempt, built on or not. Amending Law 157(I) of 2017, published on 13 November 2017, taxed the supply of non-developed building land by a person who carries on an economic activity, from 2 January 2018. It brought Cyprus into line with the EU VAT Directive, which exempts land and takes building land out of the exemption. The rule has not changed since.
What counts as building land
Regulations of 2017 define it as every unbuilt plot intended for the construction of one or more structures. The name in the Land Registry's records does not matter: a field, a yard or a threshing floor can be building land. Plots under division and plots with their own title are covered, with a water supply or without.
What stays exempt
- Land in a livestock zone.
- Land outside the development boundary that is not meant for development: environmental protection, archaeological and agricultural zones.
- Land transferred, or sold under a contract deposited with the authorities, before the amending law took effect.
The zone exemption holds whoever sells. It falls away where a planning or building permit for a large development has been obtained for the land.
When a seller of land acts in the course of business
VAT is due only where the seller supplies the land in the course of an economic activity. For a private person the Tax Department set the test in Interpretative Circular 233 of 2 April 2019.
| Sale by a private person | VAT |
|---|---|
| A plot in a tourist, commercial or industrial zone named in the circular | 19% |
| A second plot, counting every sale since 1 January 2015 | 19% |
| A plot the seller created by dividing land | 19% |
| A plot a VAT-registered sole trader bought for the business | 19% |
| The only or the last plot the person owns | None |
| Adjoining plots sold together to one buyer, as a first sale since 2015 | None |
| A plot given to the firm that divided the land, as its fee | None |
A dormant or a holding company that draws no income from a continuing activity does not register when it sells a plot, and the sale stays outside VAT.
Where land is exchanged for flats in the building to come, the tax office sees two supplies and examines each seller on its own facts. Ask the Tax Department for its view before signing, through the Tax For All portal, with its questionnaire on building land, the title deed and the draft contract.
New and used buildings: the 18-month test from 1 September 2026
The transfer of a building, or of a part of one, with its plot carries 19% when it takes place before first occupation. Offices, shops and warehouses follow the same rule as homes, and no reduced rate exists for them.
A decree of 27 February 2026 rewrote the test from 1 September 2026. A building is in use once it has been lived in, let or otherwise used on a systematic basis for 18 months or more after its delivery or construction. A flat that a developer let for a year and then sells is still new, and the sale carries VAT. A house lived in for two years is used, and its sale is exempt. Until 31 August 2026 a building stopped being new five years after completion.
Buildings with a planning application filed before 1 May 2004 stand outside these rules: their sale is exempt. A business that uses or lets a new building of its own is treated as supplying it.
Reduced VAT of 5% on a primary residence in Cyprus: 130 m², €350,000 and two ceilings
A person who buys or builds a home to live in pays 5% on part of the price. The buyer is a natural person aged 18 or over, of any nationality. The buyer takes the home as the main and permanent residence in Cyprus and holds no other home bought at the reduced rate. A company cannot use the rate.
The 5% covers the first 130 square metres of buildable area, up to a value of €350,000. Two ceilings stand above that: 190 square metres and €475,000 in all. Past either ceiling the whole price bears 19%. The Tax Department's Circular 11 of 2023 gives the examples.
| Home | Taxed at 5% | Taxed at 19% | VAT in all |
|---|---|---|---|
| 130 m², €350,000 | €350,000 | €0 | €17,500 |
| 150 m², €350,000 | €303,333.33 | €46,666.67 | €24,033.33 |
| 160 m², €370,000 | €284,375 | €85,625 | €30,487.50 |
| 191 m², €479,000 | €0 | €479,000 | €91,010 |
In the second line the part at 5% is 130/150 of €350,000, and against 19% on the whole price the buyer saves €42,466.67. A person with a disability has 5% on the first 190 square metres, up to €475,000. A family with four or more children adds 15 square metres for each child beyond the third.
How to apply for the 5% rate
- File the request for a certificate of the reduced rate in Tax For All, the Tax Department's portal, during the construction or, for a purchase, before you take possession. Buyer, spouse and co-buyer each need a tax number.
- Attach the contract of sale or the building contract, the architect's plans, the planning permit application and the contractor's declaration.
- Give the certificate to the seller or the contractor. Until it is issued they charge 19% on every payment.
- Within 12 months of moving in, send proof that you live there, such as an electricity or water bill.
Ten years: a buyer who stops living in the home earlier tells the Tax Commissioner within 30 days and repays the difference for the months that remain. On a €300,000 home of up to 130 m² the saving is €42,000, and leaving after six years costs €16,800.
Nothing is repaid on the buyer's death or on a transfer to an adult child who qualifies. The older rule, 5% on the first 200 square metres, survives for homes with a planning application filed by 31 October 2023. Declarations under it were due by 15 June 2026, and where the building permit came after 1 January 2025 or is still to come, the department accepts them until 31 December 2026.
The 5% also covers the renovation of a private home first occupied three years ago or more, where materials make up no more than half of the value of the work.
We do this for you VAT registration in Cyprus for €350
What the VAT costs a buyer, and when transfer fees apply
On a buildable plot bought from a developer for €500,000 the VAT is €95,000, and the buyer pays €595,000. Three checks come before the signature.
- Whether the price in the contract includes VAT.
- Whether you can deduct it. A VAT-registered business that will use the property for taxable sales does. A private buyer, or a business with exempt income, bears the VAT as a cost.
- Whether the seller has to charge it at all: ask for the zoning of the plot, or for the planning date and the record of use of the building.
VAT and transfer fees do not fall on the same purchase. Where VAT was paid, the Department of Lands and Surveys registers the title with no transfer fees. Where no VAT is due, the buyer pays 3% on the first €85,000, 5% on the next €85,000 and 8% on the rest, and the total is halved. A used flat at €300,000 bears €8,600: half of €17,200. Stamp duty on contracts was abolished from 1 January 2026.
What a seller or a developer has to do
- Register for VAT. A business established in Cyprus registers once its taxable sales pass €15,600 in 12 months, and one sale of land does it. The notice is due within 30 days, and each month of delay costs €85.
- Charge 19% on the full price and issue a VAT invoice. The tax point is the day the property is placed at the buyer's disposal, or the day of an earlier invoice or payment, so each advance is taxed when received.
- Declare the VAT in the quarter's return and pay it by the 10th day of the second month after the quarter. A late return costs €100, and late payment 10% of the tax and interest.
- Keep the proof of what was sold for six years: the zoning certificate, the permits, the contract.
Two reverse charges apply. A builder who works for another VAT-registered business charges no VAT on construction or repair, and the customer accounts for it under Article 11B. Until 31 December 2026 the same holds where a borrower hands building land or a new building to its lender in a loan restructuring.
A seller who leaves VAT off the invoice still owes it, with the 10% charge and interest. The transfer of a whole business as a going concern, property included, carries no VAT where the buyer is a taxable person and continues the same activity.
VAT on rent: leases of business premises
Since 13 November 2017 the lease of property to a VAT-registered tenant for a taxable business carries 19%. The Tax Department applies the rule where 90% or more of the tenant's sales are taxable on the day the contract is signed. The lease of a home stays exempt.
The landlord can opt out. Form T.D.1220 is filed in Tax For All within 30 days of the signature, and the lease is exempt for as long as the property stays with that landlord. The choice cannot be taken back.
Reclaiming input VAT on commercial property
A VAT-registered buyer who acquires building land to develop and sell new units, or to build premises and let them with VAT, deducts the 19% paid on the purchase. The tax weighs on cash flow and is no final cost, and VAT on capital assets is a ground for a refund in cash: see the guide to the Cyprus VAT refund. Where the use is part taxable and part exempt, the deduction is partial, and for immovable property it is reviewed over ten yearly intervals. Which entity buys, and for what use, decides the recovery, so settle it before the purchase.
We register a company for VAT for €350 before VAT and file its returns as part of accounting in Cyprus, from €290 a month. To hold or develop property through a company, start with company formation in Cyprus, from €1,699, and with our page on VAT registration in Cyprus. Capital gains tax in Cyprus applies separately to a gain on a later sale.
