The real estate market in Cyprus has recently witnessed significant changes to the Value Added Tax (VAT) reduction scheme for individuals interested in purchasing or building new houses. The goal is to increase income and provide benefits only to those who cannot afford to purchase real estate due to its high cost.

The revised VAT reduction scheme introduces a tiered approach based on the square meters of the property. The new criteria are as follows:

1. Properties up to 130 m²: Applicants are eligible for a reduced VAT rate of 5% for the entire property.
2. Properties between 130 m² and 190 m²: The first 130 m² will be subject to a 5% VAT reduction, while the remaining area will have a VAT rate of 19%.
3. Properties exceeding 190 m²: No VAT reduction will be granted for properties larger than 190 m², and the standard VAT rate of 19% will apply to the entire building.