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Government Considers Extending Relief Measures For Households And Businesses

In response to ongoing economic pressures, the Cypriot government is poised to extend key relief measures aimed at alleviating the financial burden on households and businesses. During a meeting on 19th June 2024, the Cabinet will decide on the continuation of a zero VAT rate on essential goods and the extension of subsidies to offset energy costs. These measures, initially set to expire on 30th June 2024, may be prolonged for an additional two months, subject to review and recommendations from the European Commission.

Zero VAT and Energy Cost Relief

The zero VAT rate on essential goods has been a critical policy tool in mitigating the impact of inflation on everyday expenses for Cypriot families. By removing the value-added tax on these items, the government aims to reduce the cost of living and ensure that basic necessities remain affordable. This measure is particularly important in the current economic climate, where inflationary pressures are affecting consumer prices across the board.

In addition to the VAT relief, the government is also considering extending subsidies on energy costs. High energy prices have been a significant contributor to overall inflation, impacting both households and businesses. The proposed extension of these subsidies is designed to provide continued support to those struggling with high utility bills, thereby easing the financial strain and promoting economic stability.

These measures come at a time when Cyprus is experiencing a complex economic landscape, characterised by rising inflation and the need for strategic fiscal management. The government’s proactive stance in extending these relief measures reflects a commitment to supporting the economic well-being of its citizens. By addressing the immediate financial challenges faced by households and businesses, the government aims to foster a more resilient and sustainable economic environment.

Cyprus Construction Trends: Permit Count Slips While Value and Scale Surge in 2025

The Cyprus Statistical Service (Cystat) has reported a notable shift in the construction landscape for 2025. The latest figures reveal a modest 1.9% decline in building permits issued in March compared to the same month last year, signaling a nuanced trend in the nation’s developmental activities.

Permit Count Decline in March

In March 2025, authorities authorised 572 building permits—down from 583 in March 2024. The permits, which total a value of €361.5 million and cover 296,900 square metres of construction, underscore a cautious pace in permit approval despite ongoing projects. Notably, these permits are set to facilitate the construction of 1,480 dwelling units, reflecting an underlying demand in the housing sector.

Q1 2025: Growth in Value, Construction Area, and Dwelling Units

While the number of permits in the first quarter (January to March) decreased by 15.8% from 1,876 to 1,580, more significant, economically relevant metrics saw robust growth. Total permit value surged by 21.7%, and the authorised construction area expanded by 15.6%. Additionally, the number of prospective dwelling units increased by 16.7% compared to the corresponding period last year. This divergence suggests that although fewer permits were issued, the scale and ambition of the approved projects have intensified.

New Regulatory Framework and the Ippodamos System

Since 1 July 2024, a pivotal transition has taken place in permit administration. The responsibility for issuing permits has moved from municipalities and district administration offices to the newly established local government organisations (EOAs). The integrated information system, Ippodamos, now oversees the licensing process, streamlining data collection on both residential and non-residential projects across urban and rural areas.

Comprehensive Data Collection for Enhanced Oversight

The Ippodamos system categorises construction projects using the EU Classification of Types of Construction (CC). This platform gathers extensive data on the number of permits authorised, project area and value, and the expected number of dwelling units. It covers a broad spectrum of construction activities—from new builds and civil engineering projects to plot divisions and road construction—while excluding renewals and building divisions. The thoroughness of this new regulatory structure promises greater operational transparency and more informed decision-making for policymakers and industry stakeholders.

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