Parliament has extended the tax relief deadline for newly built primary residences. Under Law 109(I)/2026, buyers facing municipal backlogs now have until December 31, 2026, to secure the discounted 5% VAT rate instead of the standard 19%.
The amendment, published in the Official Gazette on April 24, 2026, aims to protect buyers stalled by state planning delays.
Who Qualifies for the Extension?
The new year-end timeline applies strictly to projects where:
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The planning permit application was filed by October 31, 2023.
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The final building permit was issued after January 1, 2025, or remains pending.
Note: If the building permit is still pending, buyers must submit their permit request with their tax file to prove the delay lies with the municipality.
The June 15 Deadline Still Stands for On-Time Permits
The extension is not universal. For projects whose building permits were issued on or before December 31, 2024, the deadline remains June 15, 2026. These buyers must file immediately to avoid defaulting to stricter, more expensive tax rules.
Old vs. New VAT Frameworks
Because VAT applies only to brand-new builds (resales are exempt), qualifying for the legacy framework saves buyers tens of thousands of euros.
| Tax Parameter | Legacy Rules (Pre-June 2023) | Reform Rules (Law 42(I)/2023) |
| Discounted Area | First 200 sq. m. at 5% | First 130 sq. m. at 5% |
| Max Property Size | No Limit (Excess at 19%) | Hard cap of 190 sq. m. |
| Value Cap at 5% | No Limit | Capped at €350,000 |
| Max Transaction Value | No Limit | Hard cap of €475,000 |
The Bottom Line
Under the original rules, luxury homes could still claim a 5% VAT discount on the first 200 square meters. Under the post-2023 reform, properties exceeding 190 square meters or valued over €475,000 are completely disqualified, facing a full 19% tax on the entire transaction.
This extension gives buyers caught in administrative logjams a final window to save substantial capital. Experts urge owners to check their permit timelines and seek legal guidance before the cutoffs.
Source: Cyprus Property News