A new legislative proposal introduced by AKEL in the House of Representatives seeks to revoke the reduced 5% VAT rate currently granted to third-country nationals who build or purchase a home in Cyprus. Submitted by the party’s parliamentary representative, George Loukaides, the proposal aims to address issues arising from the widespread use of this incentive, originally designed as a social policy measure to support middle-income households.

According to the proposal’s explanatory note, large-scale property acquisitions by third-country nationals have fueled demand, driving up housing prices and worsening affordability issues. Additionally, the initiative is positioned as a means to curb state revenue losses, arguing that the VAT reduction should be reserved for domestic lower- and middle-income residents rather than benefiting non-EU buyers.