In 2025 the state will spend about €9 million on the salaries of clerics, based on an agreement between the government and the church dating to the early 1970s.
The finance ministry has budgeted €8.85 million to pay the wages of Christian Orthodox priests based in rural areas, plus another €350,000 for the clerics of other denominations – Maronites, Armenians and Latins.
The arrangement dates back to 1971 when President Makarios introduced the deal between the government, which he headed, and the church – which he also headed.
Under the arrangement, the state covers part of clerics’ wages in exchange for certain tracts of church-owned land. But almost three-quarters of this designated land – approximately 15,000 acres – is located in the north. Its market value today is estimated between €250 million and €300 million.
Moreover, many areas considered rural at the time are currently suburbs of major cities.
The state pays eligible clerics €681 a month. The priests also get general increases and cost of living allowance, just like civil servants do.
The annual sum is transferred as a whole to the Church, which then pays its clergy in line with its own internal procedures.
For the period January 1, 2024 to December 31, 2025 the number of eligible clergy was capped at 850.
As of January 1, 2026 the number of eligible clergy will increase by 0.5 per cent per year.
In addition to the wages, each year the state makes VAT refunds to the church for projects undertaken by the latter. These largely relate to building projects.
A provision in the 1971 agreement stipulates that the church is exempt from paying VAT for the construction and upkeep of premises “used for the performance of its religious work”.
Data from the state treasurer show that these VAT refunds average at about €2.5 million a year.
