Record VAT Revenues in Cyprus: What It Means for the Real Estate Market

From 2020 to 2024, Cyprus tax authorities collected a total of €15.3 billion in Value Added Tax (VAT), of which €12.9 billion were net revenues, while approximately €2.4 billion were refunded to businesses and taxpayers.

VAT revenue growth by year

According to Auditor General Andreas Antoniadis:

• 2024: €3.66 billion

• 2023: €3.49 billion

• 2022: €3.00 billion

• 2021: €2.52 billion

• 2020: €2.58 billion

VAT refunds have also been increasing – in 2024 alone, nearly €580 million were returned to businesses.

Why it matters for the economy

VAT accounts for about half of all tax revenues in Cyprus. By comparison, corporate and income taxes contribute a smaller portion of the state budget. This is mainly due to the structure of the Cypriot economy, which is characterized by:

• high levels of domestic consumption,

• growing tourism,

• an active services and trade sector.

Impact on the real estate market

The rise in VAT revenues reflects a revitalized economy, directly linked to:

• increased consumer activity,

• recovery of the tourism sector,

• growing demand for housing and real estate investments.

For buyers and investors, this means:

• the market is becoming more stable and attractive,

• the government gains additional funds for infrastructure projects that enhance property value,

• confidence in Cyprus as a destination for long-term investment continues to strengthen.

Who pays VAT in Cyprus

All entities engaged in business activities are required to pay VAT – including companies, sole traders, associations, and even non-profit organizations.

• The standard VAT rate is 19%,

• Reduced rates of 9% and 5% apply to specific goods and services.

Outlook

Economists predict that:

• ongoing digitalization of tax administration will improve transparency,

• VAT refund procedures will become more efficient,

• stronger measures against tax evasion will boost state revenues.

All these factors create favorable conditions for further economic growth and, consequently, for the continued rise in real estate prices in Cyprus.

Conclusion: Record VAT revenues confirm the expansion of the Cypriot economy and growing consumer confidence. This is a positive signal for investors considering the purchase of residential or commercial property on the island.