Cyprus Parliament has approved an extension of the reduced 5% VAT rate for first home purchases, and at Lyssiotis Law we welcome this decision wholeheartedly.
Buyers who have been waiting on pending planning permit applications through no fault of their own deserve this protection. It would have been deeply unfair to penalise individuals for delays caused by the authorities themselves, and Parliament has rightly recognised this.

What has been decided?
Eligibility for the reduced 5% VAT rate is now extended through to the end of 2026, covering transitional cases under the older scheme. Some applicants may continue to benefit from the 5% rate on up to 200m² under the previous rules.
From January 2027, the stricter framework takes full effect with 5% VAT on the first 130m² up to €350,000, and standard VAT applying beyond that threshold.

Looking ahead
Cyprus has handled this carefully, balancing relief for affected buyers with its EU compliance obligations. That is the right approach, protecting citizens while respecting the framework within which we operate.
If your application has been delayed, 2026 remains your critical deadline. The window is there but it will not stay open indefinitely.

At Lyssiotis Law we are here to guide you through the process and make sure you are in the best possible position.