If you're thinking about buying a home in Cyprus, there is an important change coming in December 2026 that you need to understand and this article explains everything in simple terms.
What Is Changing?
From December 2026, Cyprus will change how VAT (tax) works when you buy your main home. Right now, there are more flexible rules. But after this date, stricter limits will apply.
Simple Explanation of the New VAT Rules
When you buy a new home in Cyprus, this is how VAT will work:
You pay 5% VAT on the first 130 square meters
This only applies if:
The property value is up to €350,000
The total value does not go above €475,000
The size does not exceed 190 sq.m.
Important ⚠️
If the property is:
Bigger than 190 sq.m., OR
More expensive than €475,000
Then you may pay 19% VAT on the whole property, not just part of it. This can make a big difference in price.
What This Means for You
1. Higher Costs for Larger Homes:
Buyers interested in luxury or larger properties will likely face substantially higher VAT, increasing the total purchase cost.
2. Shift Toward Smaller Properties
Demand is expected to grow for homes under:
130 sq.m.
€350,000
These properties fully benefit from the 5% VAT rate, making them more attractive and affordable.
3. Developer Strategy Changes
Property developers in Cyprus are likely to:
Design homes closer to the 130 sq.m. threshold
Focus on mid-market housing
Optimize pricing to stay within VAT limits
Cyprus Real Estate Is Changing
The market in Cyprus is shifting towards:
More affordable homes
Smarter investing
Better planning for buyers
This change affects all types of property, including:
Houses
Apartments
Rentals
Investment opportunities
If you're looking for a new home in Cyprus, now is the time to learn, compare, and act.
Bazaraki— the No.1 real estate choice in Cyprus — makes it easy to search using the right filters, such as price, size (square meters), location, and property type, helping you find the perfect home faster.
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