Renovation costs in Cyprus in 2026: what drives the price, permits, contractors and the grant

What drives the price of a renovation?

Three things set most of the bill: how much work the home needs, what materials cost, and what the contractor charges for labour. We publish no prices or price ranges; we found no reliable public source for them.

Materials: the CYSTAT construction materials price index stood at 123.09 in August 2026 (2021 = 100), up 3.39% on a year earlier (Cyprus Mail, 18 Sep 2026). Construction output prices rose 4.7% in the year to the first quarter of 2026 (CYSTAT, via Cyprus Mail, 6 Jul 2026). Both figures describe the past.

The scope is the part you can control. Hidden problems found once work starts, such as a wet roof slab or rusting reinforcement, change it. Damp is common: in 2023, 32.1% of people in Cyprus lived in a home with leaks, damp or rot, against 15.6% across the EU (Eurostat, ilc_mdho01, 2023 data, updated 13 Aug 2026).

The 5% rate on renovation: who qualifies

Renovation and repair of private dwellings has carried a reduced VAT rate of 5% since 19 October 2007. Since 1 October 2011 it applies only to homes the owner uses, or will use, as a permanent residence. If materials make up more than half of the value of the job, they do not get the reduced rate. Since 20 August 2020 "renovation" includes extensions and improvements (Tax Department, circulars 199 and EE242, checked 10 Oct 2026).

PwC also lists a minimum age of three years since the home was first used (PwC Cyprus, via Mondaq, 14 Jul 2023). Ask your contractor and a tax adviser which rate applies before you sign.

Do you need a permit?

As a rule, construction, extension, alteration, repair or a change of use needs a planning permit and then a building permit from the District Local Government Organisation, applied for online through the Ippodamos system (Business in Cyprus, modified 30 Mar 2026).

• Exempt with conditions (General Exemption Decree K.D.P. 384/2022): ancillary rooms or extensions up to 20 m² in lawful developments of up to four homes; minor works for energy upgrades within the permitted floor area; water tanks, solar water heaters, air-conditioning units and solar panels on the building. A licensed engineer files a notification form, and the exemption does not apply to listed buildings, traditional village cores or protected areas (CyLaw, Gazette 30 Sep 2022).
• New since 10 July 2026: structural strengthening of an existing building that adds no floor area needs no building permit, if the building already has a permit, a registered contractor does the work, co-owners agree and an engineer files the notice (Special Exemption Decree 2026; ETEK).
• Interior repairs such as painting: we found no official list that exempts them. Ask the District Local Government Organisation or your engineer.

Who may do the work?

Building contractors in Cyprus must be entered in the Contractors’ Register and hold an annual licence from the Council for the Registration and Control of Building and Civil Engineering Contractors (Law 29(I)/2001; Business in Cyprus, updated 6 Nov 2024). Ask for the registration number before you sign.

The 2026 grant for older homes

The Save and Upgrade Homes 2026 scheme opens on 20 October 2026 and closes on 30 December 2026, or earlier when its €20 million runs out; applications are served first come, first served. Older homes can get up to €32,000 (Type A) or €24,000 (Type B), and an energy certificate dated 15 May 2026 or later is required (Cyprus Mail, 30 Sep 2026).

Who qualifies and how to apply: our guide to the scheme (Save and Upgrade Homes 2026 in Cyprus: who qualifies) and the 15 May rule for the energy certificate (Energy certificate for the 2026 grant in Cyprus).

What to find out before anyone prices the work

1. Find the cause of any damp before repainting (Damp in Cyprus homes: signs to look for).
2. Get a written list of defects, so every contractor prices the same work.
3. Ask for the contractor’s registration number and a written quote with materials and labour shown apart, which also shows whether the 5% VAT rate can apply.
4. Check with an engineer whether the works need a permit or an exemption notice.

Have the condition of the home checked before you buy, or before anyone prices the work (Before you buy). Any contractor may price the same repair list.

More on costs and taxes and related guides

• Cyprus property taxes in 2026: what you pay to buy, own, rent and sell
• Buying a home in Cyprus: 7 documents to ask for before you sign
• Separate title deed in Cyprus: what it is and what to ask
• Land Registry search certificate: how recent it must be

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