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Cyprus property market witnessed a substantial €438.2 million in sales

Despite the accumulated challenges it faces, the real estate sector in Cyprus continued to display its resilience during the third quarter of 2023, during which the Cyprus property market witnessed sales amounting to €438.2 million. The real estate sector in Cyprus has demonstrated resilience and the property market continues to endure, despite the effects of soaring inflation and high interest rates on housing loans. The council’s quarterly real estate market update, which includes comparative property sales data compiled by the Department of Land and Surveys, revealed that a total of 2,910 property transactions were concluded during the third quarter of 2023.

It is worth noting that Cyprus has attracted foreign investors from various countries, including Ukraine, Russia, Lebanon, and Israel. Nicosia district recorded 944 property transactions with a total value of €126.1 million, primarily involving plots of land, apartments, and building plots. In the Limassol district, there were a total of 801 sales, amounting to a cumulative value of €130.5 million, which exceeded the sales figures of all other regions. It is worth noting that land transactions were particularly prominent in this district, with a recorded total of 440 transfers during this period. In the Paphos district, 315 property sales were completed in the third quarter, with a total value of €48.2 million. The majority of these transfers were related to land, with a total of 125 transactions. Larnaca recorded a total of 677 property transfers, with a combined value of €101 million, with the majority of these transactions being land transfers, totaling 290. Furthermore, in the Famagusta district, there were 173 property transactions with a total value of €32.4 million. Notably, there was significant interest in both land (81) and apartments (51).

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Housing subsidy scheme for young couples and/or singles up to 41 years of age

The Cyprus government grants a one-off housing subsidy intended for young couples or young people up to 41 years of age. With the housing subsidy plan for young couples or young people up to 41 years of age, the government grants a one-off subsidy, in the context of the housing policy presented by the Minister of the Interior. According to the plan, a one-time grant of €20,000 is granted to a single young person, €45,000 to a couple, and €50,000 to a couple with one or more children for the purchase of a residential unit. Beneficiary is a person who acquires a residence, which he will use for his own residence and provided that he does not own or has owned in the last five (5) years preceding the date of submission of his application another privately owned residence himself or his spouse/cohabitant. The total useful area for the acquisition of a residential unit cannot exceed 85 sq m. Income criteria: Individual Singles: Up to €25,000,
  1. Couple (family of two) or single parent family: Up to €45,000,Family of 3: Up to €50,000,
  2. Family of 4: Up to €55,000,
  3. Family of 5 people or more: Up to €65,000
  4. Financial aid is granted for the legal acquisition of a privately owned residence for permanent ownership for at least ten (10) years.
The Plan concerns the provision of financial support for living in Municipal areas and the plot under development or consideration is within the limits of a residential zone/area. A Detailed List of Plan application areas/communities will be prepared. Plan validity period: 2 years

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New reduced scheme for 5% VAT on property in Cyprus 2023

A reduced VAT system for primary residences to boost home ownership is already in place. The reduced percentage for primary residences is 5% against a general percentage of 19%. This reduced percentage of 5% is still the same, but some criteria were changed by law in June 2023.

New criteria for the VAT on primary residence were introduced in June 2023 with Law 42(I)/2023. The reduced rate remains the same (5%), but the property’s square meters are now lower. The transitional or grace period will end on the 31st October 2023.

Conditions under the previous regime

The previous rules will be applicable to any project for which an application for planning permission will be submitted until the 31st of October 2023.

A reduced rate of 5% is applied to the first 200 square metres (sq m) of a property, provided:

  1. It is a new house/apartment.
  2. Will be used as the individual’s primary and main residence for 10 years.
  3. The applicants have completed their 18th year of age.
  4. The 200 sq m includes the internal covered areas (not including stairs).

For house areas greater than 200 sq m the standard 19% will apply to the remaining square metres.

New changes to the Cyprus reduced VAT system for a primary residence 

In June 2023, Cyprus changed the reduced VAT on primary residence criteria.

Under the new rules, the reduced rate of 5% applies to the first 130 sq m of a primary residence, provided that:

  1. The primary residence is up to EUR 350,000 in value, and
  2. The total transaction value does not exceed EUR 475,000, and
  3. The total constructed internal areas do not exceed 190 sq m.
  4. Individuals with disabilities are allowed a reduced rate of 5% on the first 190 sq m of a primary residence.
  5. Families with more than three children are allowed a further exemption of 15 sq m per child.

For house areas greater than 190 sq m and/or exceeding EUR 475.000 in value the applied VAT is 19% for the total area and price.

The new rules will not apply where planning permission has already been issued and/or application for planning permission is filed until 31 October 2023.

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