Cyprus Property VAT Update: When Is a Property Still Considered New?

A significant Cyprus VAT clarification took effect on 1 September 2026. The analysis of whether a completed building is still treated as new for VAT now focuses on first occupation and actual systematic use, rather than simply how much time has passed since construction.

This is especially relevant to completed developer stock, investment property that may never have been occupied, and property sold by a bank, fund, receiver or through an auction.

For buyers, the practical point is simple. A completed property should not automatically be treated as a VAT exempt resale simply because it was built some time ago.

The change does not itself alter the current 5% VAT primary residence thresholds, but it can affect the underlying VAT classification. Before the Sale Agreement fixes the VAT treatment, the property's delivery, occupation and use history should be verified.

Official source: K.D.P. 103/2026. Effective date: 1 September 2026.

Buying property in Cyprus and unsure of the VAT treatment? Contact Cyprus Law Chambers before signing or making a substantial payment.