Cyprus VAT Law: Key 2026 Amendments on First Occupation and Use of Immovable Property

• Amendments to Cyprus VAT Law effective 1 September 2026 clarify the definitions of “first occupation” and “first use” for immovable property.
• VAT will apply to transfers of ownership, possession, or economic control of buildings before first occupation, including sale agreements and lease-to-purchase arrangements.
• The new definitions are incorporated into both the Eighth and Fifth Schedules, ensuring consistency and affecting eligibility for the reduced 5% VAT rate on primary residences.
• A dwelling is considered “old” if at least three years have passed since first occupation; the 18-month “first use” period runs concurrently with this three-year period for renovation VAT eligibility.
• These changes provide greater legal certainty for developers, investors, and tax advisors in real estate transactions.

Source: lexology.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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