Cyprus Property Update: New Energy Performance Bill for Buildings

IMPORTANT LEGAL STATUS: This is a Bill before the House of Representatives. It is NOT yet law. The final text, commencement provisions and any transitional arrangements may change during the legislative process.

Cyprus is moving towards a new regulatory framework for the energy performance of buildings. The Regulation of the Energy Performance of Buildings Bill 2026, File No. 23.01.067.145-2026, was tabled before the House of Representatives on 17 September 2026.

The legislative initiative forms part of Cyprus's implementation of Directive (EU) 2024/1275 on the energy performance of buildings. It points towards a progressively more demanding framework for energy performance, renovation, technical building systems, renewable energy and the transition towards zero-emission buildings.

Update: 5 October 2026 - official status

The House of Representatives continues to list File No. 23.01.067.145-2026, “The Regulation of the Energy Performance of Buildings Law of 2026”, as a Bill deposited at the plenary sitting of 17 September 2026. It remains proposed legislation, not enacted law.

Separately, the Cyprus Energy Service placed draft 2026 Regulations on the inspection of heating and air-conditioning systems in public consultation from 16 July to 13 August 2026. The official notice states that the draft Regulations are a measure of partial harmonisation with Articles 23 and 25 of Directive (EU) 2024/1275. A consultation draft should not be treated as legislation in force.

Directive (EU) 2024/1275 required Member States to transpose most of its provisions by 29 May 2026 and replaced Directive 2010/31/EU from 30 May 2026. Cyprus's current legislative activity should therefore be understood in that implementation context.

What this changes in property due diligence

For new-build and off-plan projects, major renovations and redevelopment, and acquisitions from banks, funds, receivers or auctions where material refurbishment is contemplated, energy-performance compliance should now be treated as an express due-diligence workstream rather than a late-stage technical point.

Before contract, completion or an auction bid, obtain the current energy-performance position where applicable, ask the architect or engineer to identify likely compliance and capital-expenditure implications under the proposed framework, and avoid assuming that today's design, permit timing or refurbishment budget will automatically satisfy the final legislation.

We are not treating consultation thresholds, implementation dates or transitional protections as final Cyprus law unless and until they appear in enacted legislation or binding secondary legislation.

Why does this matter for Cyprus property?

The proposed framework is relevant not only to developers of new projects, but potentially also to owners contemplating extensions, substantial renovations or redevelopment of existing property. Energy performance is increasingly part of the wider legal and technical due diligence surrounding Cyprus property.

What should owners and developers consider now?

Planning and permitting: Review the present status of architectural plans, applications and outstanding steps before submission.

Energy requirements: Discuss the proposed development with the architect and relevant technical consultants against both the requirements already in force and the direction of the proposed framework.

Timing: Where a project is already sufficiently advanced, consider whether applications should proceed rather than being unnecessarily delayed.

Transitional provisions: An application submitted before enactment should NOT be assumed automatically to be exempt from future requirements. The final enacted text, commencement provisions and transitional arrangements will need to be examined.

A changing regulatory environment

For purchasers, owners and developers, the practical implications will depend on the type of building, the works proposed and the final form of the legislation. Cyprus Law Chambers will continue to monitor the Bill as it progresses through Parliament and provide further updates following material amendments or enactment.

Frequently asked questions

Has Cyprus introduced a new Energy Performance of Buildings Law in 2026?

No. As at 5 October 2026, the measure discussed in this update remains a Bill before Parliament and should not be described as an enacted new law.

When was the Bill tabled?

The House of Representatives records File No. 23.01.067.145-2026 at its sitting of 17 September 2026.

Should property owners submit applications before the legislation changes?

Owners with an existing project should consider timing with their legal and technical advisers. Earlier submission should not be represented as automatically avoiding future requirements unless the final transitional provisions establish that result.

Why is Cyprus changing the framework?

The legislative project forms part of Cyprus's implementation of Directive (EU) 2024/1275 on the energy performance of buildings.

Are the July 2026 draft Regulations already in force?

Not merely because they were consulted on. The official Energy Service notice describes them as draft Regulations placed in public consultation from 16 July to 13 August 2026. Their final legal status must be checked separately against enacted regulations and the Official Gazette.

Residential photovoltaic VAT: important October 2026 update

The Cyprus Government has approved a reduction in VAT for the purchase and installation of photovoltaic systems by residential consumers from 19% to 9%. The official Government announcement of 30 September 2026 states that the measure takes effect upon publication of the relevant implementing decree in the Official Gazette.

This photovoltaic measure is separate from the reduced 5% VAT regime that may apply to the acquisition or construction of a qualifying principal and permanent residence. The two regimes should not be merged when advising purchasers or reviewing invoices.

What should property buyers and owners check?

For a new-build or off-plan purchase, establish whether the photovoltaic system forms part of the developer's contractual supply of the dwelling or is being supplied and installed separately. The invoicing structure and the identity of the supplier can affect how the VAT treatment should be analysed.

For an existing home or renovation, obtain the supplier's quotation and VAT breakdown before payment and confirm that the proposed supply falls within the final implementing rules. Planning, building, grid-connection and other technical requirements remain separate from the VAT treatment.

For conveyancing purposes, a reduced VAT rate on a photovoltaic installation does not establish that the installation is authorised, compliant with planning or building requirements, or properly reflected in the property's technical records.

Official source and legal status

Official Government source: Council of Ministers / Ministry of Finance announcement, 30 September 2026, 'Measures of the Government against inflationary pressures in the economy'. The announcement records a reduction from 19% to 9% for the purchase and installation of residential photovoltaic systems, with effect upon publication of the relevant decree in the Official Gazette.

Legal-status note: the Government decision is official. For transaction-specific advice, the final implementing decree and its precise scope should be checked before the reduced rate is applied to an invoice or contractual price.

This publication is provided for general information only and does not constitute legal or technical advice. Individual projects should be considered according to their particular circumstances.