Cyprus lawmakers approved on Thursday a change allowing the Tax Department to examine and approve pending applications for the reduced VAT rate on primary residences, in a move affecting VAT first home policy.
The amendment was passed by the House of Representatives through an urgent procedure and introduces greater flexibility in handling delayed applications linked to building and planning permits.
Addressing delays in permits
The proposal, submitted by MP Stavros Papadouris of the Green Party, aims to address delays caused by the issuance of building and town planning permits by local authorities.
Under the new framework, the Tax Department will be able to review applications submitted up to 31 December 2026, particularly where delays occurred due to planning authorities.
Parliamentary positions
Chair of the House Finance Committee Christiana Erotokritou said the measure ensures that buyers of primary residences are not penalised due to administrative delays.
She stressed that the intention is to avoid transferring the impact of local authority delays onto homebuyers.
Papadouris said the proposal follows guidance from the Tax Department and aims to ensure the Department can act within a clear legal framework.
Opposition concerns
However, Parliamentary spokesperson for AKEL George Loukaides said the party would vote against the proposal.
He argued that the measure could allow high-value property developers to benefit from reduced VAT rates intended for genuine first-time homebuyers.
Source: CNA
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