The House on Thursday passed legislation extending the time period during which people applying for a permit for their first home may benefit from discounted VAT.

Three years ago, regulations were passed that allowed people who applied for the permit between June and end of October 2023, to qualify for the 5 per cent VAT, regardless of the date of construction of the property.

This transitional period had been set to expire at the end of June 2026 – meaning that eligibility for the lower VAT applied if the permit application was processed by then.

With the law passed on Thursday, the permit examination period – and thus eligibility for discounted VAT – has been extended to the end of this year.

The bill, tabled by Greens MP Stavros Papadouris, was fast-tracked to the plenum.

MPs who voted in favour said the extension was necessary because of delays in processing permit applications by the district self-government organisations or EOA.

The EOA assumed responsibility for these permits following the reform of local government in 2024.

In remarks on the House floor, Diko MP Christiana Erotokritou said the proposal – now law – was intended to “avoid penalising home buyers for the delays of town planning authorities”.

Akel voted against the bill, with Giorgos Loukaides arguing: “We must not allow those building sprawling buildings to benefit from reduced VAT”.

Those applying for the permit in the relevant time period would benefit from the reduced VAT rate of 5 per cent on the first 200 square metres of the residence, regardless of the total surface area.

For the area over and above the 200 square metres, the normal 19 per cent VAT applies.