Cyprus introduces an 18-month 'first use' test for new-building VAT from September 2026

What changed in detail

Cyprus Regulatory Administrative Acts K.D.P. 102/2026 and K.D.P. 103/2026 (Official Gazette Annex III(I) No. 6000, 27 February 2026) amend the Fifth and Eighth Schedules to the Value Added Tax Law 95(I)/2000. They replace the “first installation” criteria with a “first use” test — systematic use of a building for at least 18 months following delivery or completion of construction — which determines whether the transfer of a new building is subject to VAT or exempt, and whether renovation of a private residence qualifies for the reduced VAT rate. Both decrees enter into force on 1 September 2026.

What it means

The 18-month test is factual, not documentary — it turns on whether a building was actually and systematically used, which shifts the evidentiary burden onto occupancy records, utility accounts and similar proof that developers do not routinely retain in a form built for this purpose. It was gazetted six months before go-live, so there is time to set up the record-keeping before the first transaction it applies to, rather than reconstructing it afterwards.