In the coming days, officials from the Tax Department will conduct raids on homes and apartments. They suspect that some property owners have improperly taken advantage of the 5% VAT rate for primary residences but are now renting out these properties illegally through platforms like Airbnb and Booking.com.

Over recent years, numerous Cypriot and foreign buyers have purchased homes, benefiting from the 5% VAT meant for primary residences. However, instead of living in these homes, many are renting them out on a monthly or daily basis, making significant profits.

According to the law, buyers who utilize the 5% VAT but use the properties commercially must pay the standard 19% VAT to the Tax Department.

With the summer holidays approaching and an expected increase in tourists renting these properties, the Tax Department is launching a new inspection campaign to identify those breaking the law.

Numerous Tax Department officials will visit areas with rental homes or apartments to verify if these properties are occupied by the buyers benefiting from the reduced VAT or by tenants. Past inspections have shown that many properties, especially along the coast, are rented out instead of being used as primary residences.

This is the second campaign by the Tax Department to reclaim the additional VAT. In the previous campaign, officials conducted 3,000 on-site inspections, uncovering 500 buyers who had misused the reduced VAT. Another 500 taxpayers voluntarily approached the Tax Department and paid the remaining 14% VAT after being notified of the campaign.

The previous campaign resulted in nearly €40 million being added to the Department's funds.