Taxes in relation to property in Cyprus

In Cyprus, there are several taxes that may be applicable to the purchase of real estate. These taxes can include transfer fees, value-added tax (VAT), capital gains tax (CGT) and other transaction-specific charges. Cyprus stamp duty was abolished for documents signed from 1 January 2026.

Transfer Fees – Payable by the buyer

When a property is registered with the Land Registry Office, the buyer must pay transfer fees based on the value of the property as determined by the Land Registry Office. The fees are calculated as follows:

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When the transfer is subject to value-added tax (VAT), transfer fees are waived. When the transfer is NOT subject to value-added tax (VAT), transfer fees are reduced by 50%.

Stamp Duty

The Cyprus Stamp Duty Laws were repealed from 1 January 2026. Documents signed by at least one party on or before 31 December 2025 remain subject to the previous stamp-duty rules and must be stamped under the law applicable at that time.

Value Added Tax – Payable by the buyer

In Cyprus, the sale of newly constructed buildings and the land they are on is subject to value-added tax (VAT) at the standard rate of 19%. The sale of used buildings is not subject to VAT.

The purchase or construction of a house or apartment to be used as a primary residence is subject to a reduced VAT rate of 5% under specific conditions.

The sale of undeveloped land intended for the construction of one or more buildings by a person as part of their economic activities is subject to VAT at the standard rate of 19%.

If a taxable person leases immovable property for the purpose of conducting taxable business activities, the leasing of that property is subject to value-added tax (VAT) at the standard rate of 19%.

Capital Gains Tax (CGT) – Payable by the seller

CGT is applied (if the disposal is not subject to income tax) at a rate of 20% on gains from the disposal of immovable property situated in Cyprus, including gains from the disposal of shares in companies that directly own such immovable property.

From 1 January 2026, CGT can also apply to disposals of shares in companies that directly or indirectly hold Cyprus immovable property where at least 20% of the shares’ market value derives from that property. In the case of share disposals, only the portion of the gain attributable to Cyprus immovable property is subject to CGT, subject to the legislation and any applicable double-tax treaty.

Disposal, for the purposes of CGT, covers explicitly exchange, leasing, gifting, relinquishing use of right, granting right to purchase, and any payments received upon cancellation of property dispositions. Exempt from these requirements are shares listed on a recognized stock exchange.

Exemptions

The following transfers of immovable property are exempt from CGT:

• Land and land with structures bought at market value (excluding swaps, donations and foreclosures) from unrelated parties between 16 July 2015 and 31 December 2016 may be exempt from CGT on a future disposal, subject to the statutory conditions.
• Transfers due to death
• Gifts provided by a parent to a kid, a spouse to a spouse, or between third-degree relatives
• Donations to a company whose shareholders are members of the donor’s family and who continue to be members of the donor’s family for five years from the date of the transfer
• Gifts made by a family-owned business to its shareholders, if the property was originally obtained by the business through a gift. The property must be retained by the recipient for a minimum of three years.
• Donations to charity
• Expropriations
• Exchange of properties, wherein the gain realized from the exchange was used to purchase the new property. The non-taxable gain is deducted from the purchase price of the new property, so deferring the payment of tax until the sale of the new property.
• Donation of property to a political party

Lifetime exemptions for individuals on Capital Gains Tax

The exemption for the disposal of a private residence applies if the property has been used as the individual’s primary residence for at least five years. The exemption for the disposal of agricultural land applies if the land is being sold by a farmer. The third exemption applies to any other disposal of real estate that does not qualify for the first two exemptions.

These are lifetime exemptions and are subject to the statutory conditions; where more than one category applies, the combined lifetime relief is limited by the applicable rules.

0,4% contribution – payable by the seller

As of 22 February 2021, the Republic of Cyprus has implemented a 0.4% contribution on the sale proceeds of any immovable property situated in the country. The contribution of 0,4% is payable by the seller of the property and it is imposed on the sale proceeds from:

• the sale of immovable property situated in Cyprus; and

• the sale of shares in a company that directly or indirectly owns Cyprus immovable property with a general valuation. For share disposals, the fee is calculated by reference to the latest general valuation attributable to the shares. Shares listed on a recognised stock exchange are exempt.

Rental Income

Rental income from immovable property situated in Cyprus is subject to income tax. The treatment depends on the owner and the nature of the property.

For individuals, rental income is taxed at the applicable personal income-tax bands. For rents from buildings, a 20% statutory deduction from gross rent may apply, together with qualifying interest and capital allowances. GHS at 2.65% of gross rent may also apply, subject to exemptions and the overall annual contribution cap.

For Cyprus tax-resident companies and Cyprus permanent establishments of non-resident companies, taxable rental profits are generally subject to corporate income tax at 15% from the 2026 tax year, after allowable expenses.

From the 2026 tax year, rental income is no longer subject to Special Defence Contribution. From 1 July 2026, rent relating to Cyprus immovable property must generally be paid electronically, including by bank transfer, debit or credit card, or another recognised electronic method.