Cyprus – Property Taxes

What taxes and fees apply when buying a property in Cyprus?

The charges a buyer encounters at the point of purchase depend largely on whether they are acquiring a new property directly from a developer or a resale home on the secondary market. These two routes are treated very differently from a tax perspective, and identifying which category applies to your purchase is the essential first step toward accurate budgeting.

VAT on new properties

VAT is a significant cost consideration when purchasing property in Cyprus, yet it applies exclusively to new homes bought from developers — resale transactions are not affected. As of 2025, the standard VAT rate stands at 19%, levied on the purchase price of new, previously unused properties being sold for the first time, whether off-plan or recently completed.

Most owner-occupiers qualify for a reduced rate of 5% on the first 130 m² of a primary residence, provided the property’s value does not exceed €350,000, the total transaction value remains below €475,000, and the total covered area is under 190 m². The portion above 130 m² is taxed at the standard 19%. These conditions were made more restrictive in 2023, meaning older online resources may reference more favourable thresholds. Anyone claiming the lower rate must commit to residing in the property for a minimum of ten years.

Buyers with disabilities benefit from more generous provisions, with the 5% rate available on the first 190 m² rather than 130 m². Always confirm current eligibility criteria and make your application through the Cyprus Tax Department before or shortly after moving in.

Property Transfer Fees

Transfer fees are collected by the Cyprus Land Registry at the point when the title deed is formally registered in the buyer’s name. Unlike VAT, these fees are not payable at the contract stage; they fall due on the day of registration and are the buyer’s responsibility. The fee is assessed against the property’s market value as determined by the Land Registry at the time of the transfer.

The fee structure is tiered for individual buyers, starting at 3% on the first €85,000 of value, with progressively higher rates applying to the remainder. A 50% discount on transfer fees is now available for most transactions, substantially easing the financial burden on buyers. Where a new property purchase attracts VAT, the buyer is entirely exempt from transfer fees — an arrangement designed to prevent double taxation and representing a meaningful saving for purchasers of new homes.

Stamp Duty

Stamp duty was completely eliminated in Cyprus with effect from 1 January 2026 under Law N. 239(I)/2025, removing any obligation to pay duty on contracts, agreements, or other legal documents. Buyers concluding a purchase from 2026 onwards no longer need to set aside funds for this charge, which had previously been levied on the purchase agreement itself.

Legal fees and other purchase costs

Fees charged by a qualified Cypriot property solicitor typically fall in the range of 1% to 1.5% of the purchase price, though this varies according to the firm and the complexity of the transaction. It is strongly advisable to engage a lawyer who has no connection to the developer or vendor. Mortgage registration fees amount to 1% of the current market value for those purchasing with financing. Survey fees, document-related costs, and any Power of Attorney charges constitute minor additional outlays.

Worked example: buying a resale property at €250,000 (as of 2026)

For a new-build at the same price where the 5% reduced VAT rate applies, the buyer would pay approximately €12,500 in VAT but nothing in transfer fees. Always confirm exact figures with the Cyprus Tax Department and the Department of Lands and Surveys.

What taxes and fees apply when selling a property in Cyprus?

Sellers in Cyprus face a distinct set of costs from those borne by buyers. The primary tax liability on the seller’s side is Capital Gains Tax on any profit realised — addressed in depth in the following section. Beyond CGT, sellers will typically encounter estate agency commissions and legal costs.

Estate agent fees

Agency commissions in Cyprus generally run at around 3%–5% of the sale price, though the precise figure varies and is open to negotiation. Only fees paid to a registered estate agent may be offset against CGT; amounts paid to unregistered agents are not recognised as allowable deductions for tax purposes.

The 0.4% immovable property disposal levy

Since 22 February 2021, a levy of 0.4% has been applied to the proceeds from every disposal of immovable property within the Republic of Cyprus — whether the disposal is of a trading or capital nature. From 18 November 2022, the levy was extended to cover disposals of shares in companies that hold immovable property, whether directly or indirectly. While relatively modest in scale, this levy should be included in any seller’s cost projections.

Legal fees

Sellers are responsible for their own legal costs in connection with preparing and reviewing the sale contract, discharging any charges registered against the title, and completing the formal handover at the Land Registry. Fees vary between firms but are broadly comparable to those on the buyer’s side — typically around 1% of the sale price or a fixed sum agreed upfront.

Transfer fees on the sale

Transfer fees are the buyer’s obligation, not the seller’s. That said, sellers should be aware that any outstanding municipal charges, sewerage levies, or community dues attached to the property will need to be cleared before or at the point of completion, since such debts remain tied to the property rather than to the departing owner.

Is Capital Gains Tax payable on property sales in Cyprus?

Cyprus does impose Capital Gains Tax on property disposals, but the framework is markedly more generous than CGT regimes found elsewhere — chiefly because of inflation indexation, substantial lifetime allowances, and the relatively narrow scope of the tax itself.

Rate and scope

CGT in Cyprus is charged at a flat rate of 20% on the profit arising from a disposal and applies to both individuals and companies irrespective of their tax residence. The tax covers gains from the disposal of immovable property located in Cyprus. Crucially, Cyprus CGT is confined to Cyprus property; profits from share sales and disposals of overseas property fall entirely outside its scope, making Cyprus an especially attractive tax environment for those arriving from high-tax countries.

How the gain is calculated

The taxable gain is broadly computed as the difference between the sale proceeds and the original acquisition cost plus the value of any improvements, with that cost base adjusted for inflation up to the disposal date using the Cyprus Consumer Price Index. Once the inflation-adjusted cost has been established, the seller may add other allowable expenses connected with the property — including renovations that enhance its value, transfer fees paid at purchase, estate agency commissions, legal fees, and loan interest.

Qualifying improvement costs include structural or permanent additions such as a swimming pool, garage, or central heating system, provided all requisite planning permissions are in place. Cosmetic works such as painting or expenditure on furnishings are not accepted by the Tax Department.

Lifetime allowances and exemptions

Three separate lifetime allowances exist, subject to a combined ceiling, and may be deducted from taxable capital gains. An individual is generally entitled to an allowance only on their first disposal, although where a previous sale did not exhaust the full allowance, the unused balance carries forward to a future disposal.

• A general exemption of €17,086 on gains from any property disposal (available on the first sale).
• An exemption of up to €85,430 on the disposal of a main residence. To qualify, the owner must have used the property exclusively as their own home for at least five consecutive or non-consecutive years (ten years if this is a second claim).
• An exemption of €25,629 on agricultural land where farming is the owner’s principal occupation.

Although these allowances may be combined, the total claimed by any individual cannot exceed €85,430, and the allowance is a once-in-a-lifetime entitlement.

It should be noted that tax reform legislation enacted on 22 December 2025 increased the tax-exempt amounts for disposals of immovable property, agricultural land, and main residences, and introduced certain additional exemptions, with effect from 1 January 2026. Verify the current figures with the Cyprus Tax Department.

Other notable CGT exemptions

No capital gains tax arises when property passes on death. Property may also be gifted to spouses or relatives up to the third degree without triggering any CGT liability. Donations to charitable organisations are similarly exempt. Where a seller disposes of one Cyprus property and reinvests the proceeds in another of equivalent value — an exchange of like-for-like properties — CGT is deferred rather than immediately charged, with the gain from the old property reducing the cost base of the new one.

Does CGT apply to non-residents?

CGT in Cyprus is levied at the same 20% rate regardless of where the selling individual or company is tax resident. Non-residents disposing of Cyprus property are therefore fully within scope. Cyprus has, however, concluded an extensive network of double taxation treaties, which may alter the overall tax position depending on the seller’s country of residence. A locally qualified tax adviser should be consulted to determine whether any treaty relief is available.

Practical CGT example

A seller acquired a Cyprus apartment in 2005 for €150,000 and sells it in 2025 for €350,000. After applying the Cyprus Consumer Price Index to adjust the original purchase price for inflation, the indexed cost rises to approximately €210,000. Eligible legal costs and improvements of €15,000 (similarly inflation-adjusted) are then deducted. The resulting gain before allowances stands at approximately €125,000. Applying the €17,086 general lifetime allowance and the €85,430 primary residence allowance — assuming at least five years of owner-occupation — reduces the taxable gain to roughly €22,484, producing a CGT liability of approximately €4,497 at the 20% rate. Always confirm the applicable CPI factors and current allowance figures with the Cyprus Tax Department before filing.

Are there annual property taxes in Cyprus?

One of the most striking features of property ownership in Cyprus is the near-total absence of recurring annual taxes. This sets the island apart from much of the rest of the EU, and from systems such as council tax in the United Kingdom or property rates in Ireland, where annual charges can be a significant ongoing expense.

Abolition of the national Immovable Property Tax

Cyprus brought its national immovable property tax to an end in January 2017, representing a major shift in the country’s approach to real estate taxation. Property owners had previously been required to pay this annual charge based on the government’s assessed market value of their real estate, but that obligation no longer exists at the national level.

Municipal charges that remain

The immovable property tax was eliminated with effect from 1 January 2017. Municipal authorities retain the ability to levy local charges covering services such as street lighting, sewerage maintenance, and refuse collection. These vary from one municipality to another and according to property size, but they rarely exceed €500 per year.

Municipal charges generally consist of three components:

• Municipal tax: 0.24 per thousand (0.024%) of the property’s value annually.
• Local authority service fees covering refuse collection, street lighting, sewerage, and comparable community services, typically ranging from €85 to €256 per annum depending on the size of the property.
• A sewerage fee calculated on the assessed property value, with rates in the range of 0.03‰ to 0.035‰, payable to the relevant local sewerage board.

For a typical mid-range apartment with a value of around €200,000, total annual municipal charges are likely to fall between €150 and €400 — a modest figure by European standards. Cyprus’s online payment platforms such as TAXISnet allow owners to keep on top of their local property obligations conveniently.

Community/maintenance fees

Owners of apartments or properties within gated developments will also face charges for the upkeep of shared facilities — gardens, swimming pools, security services, and waste management. These vary considerably depending on property size and the level of amenities, ranging from as little as €50 per month in smaller blocks to €200 or more per month in premium complexes. While not a tax, they represent a genuine and recurring cost of ownership in communal developments.

How is rental income from property taxed in Cyprus?

Rental income generated by Cyprus property is brought into charge under the standard personal income tax bands. The treatment differs according to whether the landlord is a Cyprus tax resident, and there are important distinctions to draw between conventional long-term lettings and income from short-term rental platforms.

Income tax on rental income

Gross rental receipts, reduced by a flat 20% deduction for building-related expenses (in lieu of deducting actual repair and maintenance costs), a deduction for capital allowances on the building, and any interest on loans taken out to acquire the property or land, are subject to personal income tax under the standard progressive bands. This 20% standard deduction is a valuable concession, meaning that only 80% of gross receipts are brought into the tax calculation.

Tax is applied on a progressive scale running from 0% to 35% of annual profit, with a 0% rate applying to the first €19,500 of yearly income. Higher bands apply to income above this threshold up to the 35% top rate. This approach broadly mirrors the way rental income is handled in countries such as France or Portugal, where rental receipts are aggregated with other personal income and taxed progressively.

Special Defence Contribution (SDC)

Gross rental income — without any deductions — is also liable to Special Defence Contribution at an effective rate of 2.25%. However, since 16 July 2015, SDC has applied only where an individual is both a Cyprus tax resident and Cyprus domiciled for SDC purposes. Non-domiciled Cyprus tax residents and non-residents are therefore excluded from SDC on rental income — a meaningful benefit for many expat landlords.

Short-term rentals and Airbnb

On 13 September 2023, the Cyprus Tax Authority published a Circular under which rental income from self-catering accommodation let through online platforms is to be treated, subject to specified conditions, as business income. As such, it is subject to personal income tax but exempt from SDC. Owners letting through platforms such as Airbnb should register as self-employed with the Tax Department and should also consider whether their annual turnover triggers a VAT registration obligation.

VAT on commercial lets

Landlords may additionally be required to account for VAT at 19% on rental income if they receive more than €15,600 per year from rent, began letting the property after November 2017, and the tenant occupies the premises for business purposes — for example as a shop or office. Residential lettings do not generally give rise to a VAT liability.

Non-resident landlords

Non-resident individuals are required to pay a General Healthcare System (GHS) contribution on rental income at a rate of 2.65% of gross receipts. Non-residents must submit an annual personal income tax return to the Cyprus Tax Department declaring their Cyprus-source rental income. Many non-resident owners appoint a local tax representative to manage their compliance obligations on their behalf.

Does inheritance tax apply to property in Cyprus?

Inheritance Tax was abolished in Cyprus in 2000, placing the island among a small group of EU countries that apply no charge whatsoever on estate transfers. The contrast with other jurisdictions is striking: France imposes inheritance tax at rates reaching 45% in some cases, and the United Kingdom levies 40% on estates above the nil-rate band. Cyprus has no comparable charge at all.

Combined with the absence of any annual wealth tax on property, this makes Cyprus a particularly compelling destination for estate planning and long-term investment purposes.

Property passing on death

No capital gains tax is triggered when property transfers on death. The process of passing title to beneficiaries involves probate proceedings through the Cyprus courts, and the heir will pay a reduced or nil transfer fee depending on their relationship to the deceased. Transfers from parent to child carry no transfer fee at all; transfers between spouses or relatives to the third degree attract a nominal fee of 0.1%, computed on 2013 assessed values.

Non-residents and foreign heirs

Cyprus inheritance tax rules — or more accurately, the absence of such rules — make no distinction based on the nationality or residence of the heir. A foreign national inheriting Cyprus property from a Cyprus-based estate will face no inheritance tax liability in Cyprus. There may, however, be tax consequences in the heir’s country of residence in connection with the inherited assets. Cyprus maintains double taxation treaties with many European and other countries, protecting residents from being taxed twice on the same assets. Prospective heirs should seek advice from a professional with expertise in both Cyprus law and the law of their home jurisdiction.

Does gift tax apply to property transfers in Cyprus?

Cyprus does not operate a freestanding gift tax on lifetime property transfers. Instead, the relevant rules function through the transfer fee structure and CGT exemptions, making gifts within families a relatively tax-efficient means of passing on real estate.

Transfer fees on gifts

For gratuitous transfers of property, transfer fees are calculated on the property’s 2013 assessed value according to the following schedule: from parents to children — nil; between spouses — 0.1%; between third-degree relatives — 0.1%; to trustees — €50.

CGT on gifts

Transferring property as a gift to a spouse or family member up to the third degree does not give rise to any CGT liability. Further exemptions are available under relevant conditions, including gifts between spouses, children (including foster children), and third-degree relatives, gifts to family companies, and gifts to charitable organisations.

Gifts to family companies

A gift to a company all of whose shareholders are, and remain for at least five years thereafter, members of the donor’s family is exempt from CGT. This is particularly relevant for expats who currently hold or are contemplating holding Cyprus property through a corporate vehicle.

Practical note

Even where no fees or tax are payable, a deed of gift must be prepared by a lawyer and lodged with the Land Registry. There are administrative and legal costs associated with this process, and qualified legal assistance should always be engaged to document a gift properly.

Are there any tax advantages or incentives for buying property in Cyprus?

Cyprus offers a number of notable tax advantages for property purchasers and owners, several of which are especially relevant for those relocating from higher-tax jurisdictions.

Reduced VAT for owner-occupiers on new builds

Cyprus provides a meaningful incentive for buyers who intend to occupy a property as their principal and permanent home: a reduced VAT rate of 5%, applicable to the first 200 m² of the home’s covered area. As noted earlier, the precise qualifying conditions — a property value ceiling of €350,000, a total transaction cap of €475,000, and a covered area below 190 m² for the 5% band to apply to the first 130 m² — were revised in 2023. Any buyer wishing to take advantage of this relief should verify the current requirements with the Tax Department before exchanging contracts.

Inflation indexation for CGT

The built-in inflation adjustment within the CGT calculation, based on the Cyprus Consumer Price Index, can dramatically reduce the taxable gain on properties held over an extended period. Long-term owners derive the greatest benefit from this indexation, which is more advantageous than the simple annual exemption approach adopted in a number of other countries.

No CGT on overseas assets for Cyprus residents

One of the most appealing features of residing in Cyprus from a tax perspective is the narrowness of CGT: only gains from the disposal of Cypriot real estate are chargeable. Profits from the sale of shares, corporate holdings, overseas property, or any other assets are entirely outside the scope of Cyprus CGT. This is a substantial advantage for anyone relocating to Cyprus with investment portfolios or foreign property holdings.

No inheritance or gift tax

As discussed in the preceding sections, the complete absence of both inheritance tax and gift tax in Cyprus makes the island exceptionally favourable for generational estate planning compared with most of Western Europe and many other jurisdictions around the world.

Non-domicile status

Individuals who become Cyprus tax residents without being domiciled in Cyprus — a status that can persist for up to 17 years following arrival — are exempt from SDC on rental income and on dividend income. This is of particular relevance to property investors who also hold income-producing investments elsewhere.

Double taxation treaties

Cyprus has concluded double taxation treaties with many European and other countries, protecting residents from facing tax liability on the same income or gains in two different jurisdictions. With over 65 such treaties in force, Cyprus has one of the most comprehensive networks in the EU, and this is a key reason the island continues to attract international investors and expats. The current list of treaties can be found on the Cyprus Ministry of Finance Tax Department website.

Do different rules apply to foreign buyers or non-residents purchasing property in Cyprus?

Cyprus is broadly welcoming to overseas property buyers, and the tax framework governing purchases, ownership, and sales is largely consistent for non-residents and residents alike. There are, however, several procedural and practical points that foreign buyers should keep in mind.

EU citizens

Nationals of other EU member states enjoy the same rights as Cypriot citizens when purchasing property in Cyprus and face no restrictions. There are no surcharges, supplementary taxes, or ownership limits that apply simply because the buyer holds citizenship of another EU country.

Non-EU nationals

Buyers from outside the EU may also purchase property in Cyprus, though historically certain limits on the total land area that could be acquired existed — these restrictions have since been substantially relaxed. There is no foreign buyer surcharge of the kind seen in markets such as Canada, Australia, or Singapore. The same VAT, transfer fee, and CGT rules apply regardless of the buyer’s nationality.

CGT for non-residents

As previously noted, CGT applies at the flat rate of 20% regardless of the seller’s tax residence. Non-residents who dispose of Cyprus property at a later date are fully within the scope of this charge. Personal lifetime allowances — the €17,086 general exemption and the €85,430 primary residence exemption — are equally available to non-resident individuals, provided the underlying qualifying conditions are satisfied.

Reduced VAT for non-residents

The 5% reduced VAT rate on a primary residence is only accessible where the buyer genuinely commits to occupying the property as their main and permanent home. A non-resident purchasing a holiday home or buy-to-let investment would therefore pay the full 19% VAT on a new-build, rather than the reduced rate.

Annual municipal taxes

All property owners, regardless of nationality, pay the same municipal charges. This obligation persists even where the owner does not reside in Cyprus full-time. Non-resident owners should ensure they have a reliable correspondence address in Cyprus for tax purposes and are fully aware of their annual obligations.

Compliance and representation

Non-resident owners may face different filing requirements, including a need to appoint a local tax representative to ensure compliance with the Cyprus Tax Department. Engaging a locally qualified accountant or lawyer is strongly recommended for non-residents, particularly to ensure that annual income tax returns covering Cyprus-source rental income are filed correctly and on time. The Cyprus Tax Department and the Department of Lands and Surveys are the principal official bodies to consult for authoritative guidance.

How do I buy a property in Cyprus? — Step-by-step process

1. Obtain a Tax Identification Number (TIN): Register with the Cyprus Tax Department to obtain a TIN, which is required for all property-related tax filings and the title deed transfer process.
2. Open a Cyprus bank account: Most lawyers and the Land Registry require funds to be traceable through a local or recognised account. This also facilitates payment of ongoing municipal taxes.
3. Instruct an independent property lawyer: Appoint a lawyer who is not connected to the developer or selling agent. They will carry out title deed searches at the Land Registry, check for any mortgages or encumbrances, and draft or review the sale agreement.
4. Sign the sale agreement: Once terms are agreed, both parties sign the contract of sale. From 2026 onwards, no stamp duty is payable on this document under Law N. 239(I)/2025.
5. Deposit the contract at the Land Registry: The signed contract must be deposited at the District Land Registry Office to protect the buyer’s priority rights over the property.
6. Pay VAT (if applicable): For new-build properties, VAT must be paid before or at completion. If applying for the reduced 5% rate, submit the application to the Tax Department in advance.
7. Complete title deed transfer: On the agreed completion date, attend the Land Registry with your lawyer to execute the title transfer. Pay the applicable transfer fees (or confirm VAT exemption applies). The title deed is then registered in the buyer’s name.
8. Register with local municipality: Notify the local municipality of the change of ownership so that annual municipal charges are correctly billed to the new owner going forward.

Frequently asked questions: property taxes in Cyprus

Is there an annual property tax in Cyprus?

The national Immovable Property Tax was abolished in Cyprus in 2017, so there is no longer any recurring annual charge on property at the national level. Local municipalities do, however, levy modest annual fees for services such as refuse collection and sewerage. For most residential properties, these charges come to well under €500 per year.

Do I pay both VAT and transfer fees when buying a new property?

No. Buying a new property and paying VAT means you are fully exempt from transfer fees — this arrangement exists specifically to prevent double taxation. You are liable for one or the other, not both. By contrast, resale properties attract transfer fees but are not subject to VAT.

How much is Capital Gains Tax in Cyprus and when is it due?

Capital gains tax is levied at a flat rate of 20% on any profit derived from the disposal of immovable property in Cyprus. It is the seller’s liability and is typically due within one month of the sale completing. Individual sellers may be entitled to lifetime exemptions reaching up to €85,430 for a primary residence, which can substantially reduce or entirely eliminate the CGT owing. Always confirm the current allowance figures with the Cyprus Tax Department before filing.

Is inheritance tax payable on Cyprus property?

There is no inheritance tax in Cyprus — the charge was abolished in 2000 — making it one of very few EU countries to apply no tax on estate transfers. Property passing on death is also exempt from CGT at the point of transfer, though heirs may become liable for CGT if they subsequently sell the inherited asset.

Can I avoid stamp duty when buying in Cyprus?

Stamp duty was fully abolished in Cyprus as of 1 January 2026 under Law N. 239(I)/2025. Anyone completing a purchase from that date onwards pays no stamp duty on their purchase contract.

How is Airbnb or short-term rental income taxed in Cyprus?

Income from self-catering accommodation let through online platforms is treated, subject to certain conditions, as business income — making it subject to personal income tax but exempt from Special Defence Contribution. Hosts using platforms such as Airbnb should register with the Tax Department as self-employed and consider whether their annual turnover reaches the threshold that would require VAT registration.

Do non-residents pay the same property taxes as residents in Cyprus?

For most transaction taxes — including transfer fees and CGT — the rules are the same for non-residents as for residents. The key differences are: non-residents cannot access the 5% reduced VAT rate unless they genuinely occupy the property as their primary home; non-residents are not subject to SDC on rental income; and non-residents may owe a GHS contribution at 2.65% on gross rental receipts. Always confirm your individual circumstances with a locally qualified adviser and the Cyprus Tax Department.

Can I deduct renovation costs from Capital Gains Tax when selling?

Structural and permanent improvements — such as the addition of a swimming pool, garage, or central heating system — are accepted as deductible costs, provided the relevant planning permissions were obtained. Cosmetic expenditure such as painting, or money spent on furnishings, is not recognised by the Tax Department. Retaining all receipts and planning permissions for improvement works is advisable, as these costs can make a meaningful difference to the CGT liability when the property is eventually sold.