Property Taxes in Cyprus 2026: Guide for Property Buyers and Investors

Cyprus has one of the most favourable real estate tax systems in the EU for foreign buyers and investors. The key advantages include:

• property taxes apply uniformly across the entire territory of Cyprus and do not depend on the region of purchase;
• there is no annual national property tax;
• tax rules apply equally to both residents and non-residents;
• a transparent and straightforward tax structure applies to property acquisition, ownership, and disposal.

Against this background, the Cyprus property market continues to demonstrate steady growth driven by strong international demand, an attractive tax framework, and the reliability of EU-based legislation. In addition, purchasing property in Cyprus may also provide opportunities to obtain residency, subject to applicable conditions.

This guide has been prepared specifically for private (non-corporate) investors considering property purchases in Cyprus and reflects the key changes introduced under the 2026 tax reform, including the abolition of certain fees and updated rules for the taxation of real estate income.

Taxes When Buying Property in Cyprus

Taxes when purchasing property differ depending on whether you are buying a new property from a developer (primary market) or a resale property on the secondary market. In each case, the structure of payments is different, so the total amount of costs may vary significantly.

Taxes on Primary Real Estate Purchases in Cyprus

When purchasing newly built property from a developer in Cyprus, VAT applies instead of transfer fees. At the same time, stamp duty on real estate sale contracts has been abolished for agreements concluded from January 1, 2026. As a result, the main tax payable when purchasing a new property is VAT, which is charged at either 5% or 19% depending on the purchase conditions.

The reduced VAT rate of 5% is a significant advantage for buyers relocating to Cyprus and purchasing property for their own primary residence. On April 16, 2026, the Parliament of Cyprus officially extended the transitional regime allowing the application of the reduced VAT rate of 5% (instead of the standard 19%) for first-time home purchases.

How the benefit applies in 2026:

• the 5% VAT rate applies to the first 200 m² of residential property
• the area exceeding 200 m² is subject to 19% VAT
• the property must be used as the buyer’s primary residence

What will change from January 1, 2027:

After the transitional period ends, new and stricter conditions for applying the reduced VAT rate will come into force.

The rate may be reduced to 5% provided that the following conditions are met:

• the property value is up to €350,000, and the total transaction value does not exceed €475,000
• the buildable area does not exceed 190 m² (the reduced rate applies to the first 130 m²)
• the property must be used as the applicant’s primary and permanent residence

Thus, the extension of the transitional regime until the end of 2026 provides buyers with an additional opportunity to purchase their first home under more favorable tax conditions.

Conditions for applying 5% and 19% VAT in Cyprus (2026–2027)

Additional Property Purchase Costs

Taxes When Buying Resale Property in Cyprus

Transfer Fees

When purchasing a resale property, VAT does not apply. Instead, buyers pay transfer fees upon registration of the Title Deed at the Land Registry. The fees are calculated based on the market value assessed by the authorities.

Cyprus Transfer Fee Rates

Key Benefit: 50% reduction on transfer fees currently applies to resale properties

Taxes on Rental Income in Cyprus

Rental income in Cyprus is subject to personal income tax under a progressive tax scale. The tax is calculated on net income after allowable deductions, which significantly reduces the effective tax burden for property owners.

• Income tax on rental income: applies at progressive rates from 0% to 35%, calculated on net profit after deductible expenses.
• Healthcare contribution (GeSY): an additional contribution of 2.65% applies to rental income.
• Special Defence Contribution (SDC): abolished as of January 1, 2026, significantly reducing the overall tax burden on rental income.

Allowable deductions include property maintenance expenses, mortgage interest payments, as well as capital allowances and depreciation.

For a detailed breakdown, read our full guide “Rental Income Tax in Cyprus: A Guide for Real Estate Investors” on how rental income is taxed in Cyprus and how the system is structured.

Taxes When Selling Property in Cyprus

Capital Gains Tax (CGT)

When selling property in Cyprus, Capital Gains Tax (CGT) applies at a fixed rate of 20% on the net profit from the transaction. The tax is calculated not on the full sale price but on the difference between the purchase price and the sale price after allowable deductions.

Capital Gains Tax applies to the disposal of:

• immovable property located in Cyprus;
• shares in companies that directly own real estate in Cyprus.

This rule applies to both Cyprus residents and non-residents.

How the taxable gain is calculated

The taxable gain is calculated using the following formula:

Sale price – Purchase price – Allowable expenses = Taxable gain

Allowable deductions

To reduce the taxable gain, sellers may deduct:

• acquisition-related expenses (transfer fees, legal fees);
• capital improvements (renovation, reconstruction, extensions);
• inflation adjustment based on official indexation coefficients.

Capital Gains Tax exemptions in Cyprus

In certain cases, Cyprus legislation provides exemptions or reductions from Capital Gains Tax, for example:

• sale of a primary residence (subject to conditions);
• transfers between close family members;
• inheritance of property.

Note: All lifetime exemptions are one-time limits per individual, not per property transaction.

Important distinction: Capital Gains Tax vs Income Tax

In most cases, property sales in Cyprus are subject to Capital Gains Tax at 20%. However, if the tax authorities determine that transactions are carried out on a systematic investment or commercial basis (for example, frequent buying and reselling of property for profit), the income may be classified as business income. In such cases, personal income tax of up to 35% applies instead of CGT.

Property Ownership Costs in Cyprus

Property ownership costs in Cyprus remain relatively low, as there is no annual national property tax. The main expenses for owners typically include insurance, utility payments, and routine property maintenance. The total amount depends on the location, property type, size, and infrastructure of the residential complex.

For example, an apartment in a modern residential complex in Limassol with a swimming pool, lifts, landscaped areas, and maintenance services typically costs around €1,200–€2,500 per year, while in premium-class developments with security, a gym, and reception services, expenses may reach €3,000+ per year, excluding individual utility bills (electricity and water).

Feod Group Services for Property Purchases in Cyprus

Since 2007, Feod Group has been supporting real estate transactions in Cyprus, ensuring legal security of the purchase and an efficient tax ownership structure at every stage — from property due diligence to future rental or resale.

We operate not as a real estate agency, but as a legal and investment consultant representing exclusively the buyer’s interests and ensuring a secure transaction structure throughout the entire acquisition process.

Our services include:

• legal due diligence of the property and Title Deed verification;
• analysis of legal and financial risks prior to signing the contract;
• tax structuring of the transaction during purchase and ownership;
• preparation and review of the sale and purchase agreement.

Legal Consultation Before Purchasing Property

Conducting legal and tax due diligence before signing the contract allows buyers to assess all costs in advance, preserve eligibility for available tax benefits, and avoid potential risks when purchasing property in Cyprus.

Schedule a consultation to avoid mistakes before paying a deposit.

Online consultations | Office in Larnaca