Cyprus Insights/Legal & Tax Insights
Taxes on Real Estate in Cyprus – The 2027 Guide for Buyers & Investors
Short answer: buying a new-build in Cyprus costs 19% VAT (5% on a qualifying main home) and no transfer fees; buying a resale costs transfer fees of 3%, 5% and 8% on the price bands, halved, and no VAT. Stamp duty was abolished for contracts signed from 1 January 2026. There is no state annual property tax. A sale is taxed at 20% on the gain after inflation indexation and lifetime exemptions of up to €150,000, plus a 0.4% levy on the sale proceeds.
The table shows which tax meets you at which stage. Rates are those in force for 2026 and come from the PwC Cyprus tax summaries, the Department of Lands and Surveys and our own checks; the section for each tax gives the detail.
| Stage | Tax | Rate in 2026 |
|---|---|---|
| Buying a new-build | VAT | 19%; 5% on the first 130 m² of a qualifying main home. No transfer fees |
| Buying a resale | Transfer fees | 3% / 5% / 8% by price band, halved when no VAT is charged. No VAT |
| Signing the contract | Stamp duty | None for contracts signed from 1 January 2026 |
| Owning | Municipal charges | No state property tax since 2017; small municipal charges |
| Renting it out | Personal income tax | Bands from 0% to 35% on rent after a 20% deemed deduction; GHS 2.65% |
| Selling | Capital gains tax and levy | 20% on the indexed gain after exemptions; 0.4% levy on the proceeds, paid by the seller |
| Giving or inheriting | Transfer fees only | Nil from parents to children, 0.1% between spouses; no inheritance tax |
The full cost of a purchase, with legal and agent fees added, is in the cost of buying property in Cyprus, and the VAT rules are worked through in Cyprus property VAT explained.
1. VAT on Real Estate in Cyprus
VAT is applicable only on new properties — not resales. Here's how it works:
| Type of Property | VAT Rate | Eligibility |
|---|---|---|
| New-build (non-primary) | 19% | All buyers unless exemptions apply |
| Primary residence | 5% | 5% on the first 130 m² (value up to €350,000); extra m² up to 190 m² (value up to €475,000) pay 19%; above 190 m² or €475,000 the whole price pays 19%. First-time use only |
| Resale property | 0% | No VAT, only transfer fees apply |
Reduced VAT (5%) applies only if:
- The buyer is an individual (not a company),
- The property is used as a primary residence,
- The total covered area is under the legal threshold,
- The buyer has not used this benefit previously.
Selling or leasing within 10 years after purchasing with reduced VAT? A portion of the VAT must be returned to the Tax Department.
2. Transfer Fees
The buyer pays transfer fees to the Department of Lands and Surveys when the title deed moves to the new owner. No transfer fees are payable on a purchase that carries VAT, which means a new-build from a developer, and the bands below are halved when the purchase is not subject to VAT, which means a resale.
| Property value (€) | Statutory rate on the band | Rate paid on a resale (no VAT) |
|---|---|---|
| Up to 85,000 | 3% | 1.5% |
| 85,001 – 170,000 | 5% | 2.5% |
| Over 170,000 | 8% | 4% |
Worked example, a €300,000 resale: 3% of the first €85,000 is €2,550, 5% of the next €85,000 is €4,250 and 8% of the remaining €130,000 is €10,400, which makes €17,200 at the statutory rates and €8,600 after the 50% reduction. The same €300,000 as a new-build carries 19% VAT, €57,000 on top of the price, and no transfer fees; at the 5% rate for a qualifying main home the VAT is €15,000.
3. Stamp Duty
Cyprus abolished stamp duty on property sale agreements and other legal documents with effect from 1 January 2026, under Law 239(I)/2025 (published in the Official Gazette on 31 December 2025). If your sale agreement is signed from that date onward, no stamp duty is payable at all. The other changes of the 2026 reform are in our guide to the Cyprus tax reform of 2026.
A contract actually signed before 1 January 2026 still falls under the previous rules, even if completion happens later — the historical rates are shown below for reference.
| Contract signed | Stamp duty |
|---|---|
| From 1 January 2026 | None — abolished (Law 239(I)/2025) |
| Before 1 January 2026 (historical) | 0.15% (€5,001–€170,000), 0.20% above, capped at €20,000 |
Deadline (historical): for contracts signed before 1 January 2026, stamp duty had to be paid within 30 days of signing.
4. Capital Gains Tax (CGT)
CGT is charged only when selling a Cyprus-based property.
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Rate: 20% on the gain. The gain is the sale price less the purchase price plus improvements, with that cost adjusted for inflation by the Cyprus consumer price index, and less costs of buying and selling such as transfer fees, legal fees and loan interest. The tax also reaches shares in a company that owns Cyprus property.
Exemptions & Allowances (contracts signed from 1 January 2026; before that date: €85,430, €17,086 and €25,629):
| Situation | Exemption Amount |
|---|---|
| Primary residence (5+ years) | €150,000 |
| Any other property (once per lifetime) | €30,000 |
| Agricultural land by farmer | €50,000 |
The three lifetime exemptions together are capped at €150,000, so a person who has used €150,000 on a main home has none left for a later sale. Before 2026 the amounts were €85,430, €17,086 and €25,629.
Worked example: an investor sells a second property for €400,000. The purchase price, improvements, transfer fees and legal costs add up to €320,000, so the gain is €80,000 before the inflation adjustment, which lowers it further. The €30,000 once-in-a-lifetime exemption leaves €50,000, and 20% of that is €10,000.
Separately, a levy of 0.4% on the sale proceeds applies to disposals of Cyprus property; on €400,000 it is €1,600, and it is the seller's obligation. Gifts between spouses and to children and third-degree relatives are among the transfers exempt from CGT.
Keep proof of costs like renovations, transfer fees, and commissions — they reduce your taxable gain.
5. Rental Income Tax
If you rent out your property in Cyprus, your rental income is subject to income tax:
- Up to €22,000: 0%
- €22,001 – €32,000: 20%
- €32,001 – €42,000: 25%
- €42,001 – €72,000: 30%
- €72,000+: 35%
The bands apply to gross rent less a deemed deduction of 20% for buildings, which stands in for actual repairs and maintenance, less capital allowances on the building and interest on the loan used to buy the property. The 20% is a replacement, not an addition: you do not also deduct maintenance and management costs. The special defence contribution on rent was abolished from 2026. The General Healthcare System contribution of 2.65% on rental income still applies, up to an annual income of €180,000.
6. Double Tax Treaties (DTTs)
Cyprus has DTTs with over 60 countries — including:
- Germany, Austria, Switzerland
- UK, Ireland, Poland, Norway, Sweden, Israel, South Korea, etc.
- Russia, Kazakhstan, Armenia, Georgia
This means that:
- You won’t pay double tax in both Cyprus and your country,
- How Cyprus-source rent is relieved at home depends on the treaty. Poland, for example, applies the exemption-with-progression method (tax authority interpretation of 12 March 2026): the rent is exempt in Poland but raises the rate on your other income.
Consult your local tax advisor for country-specific implications.
7. Immovable Property Tax in Cyprus: Tax Residency & Annual Charges
- The state immovable property tax was abolished in 2017, but municipalities still charge their own small annual property tax and fees: as of October 2026 roughly €76 to €105 a year on a €300,000 valuation in the four municipalities we checked, plus sewerage, refuse and communal charges. The full yearly bill with three worked cases is in annual property tax in Cyprus.
- But if you stay more than 183 days per year, you may become a Cyprus tax resident — and benefit from the non-dom regime (no SDC on dividends and interest while you are non-domiciled; the 2.65% GHS contribution still applies).
Check All Villas in Cyprus for Sale here.
The 183-day and 60-day tests are explained in tax residency in Cyprus, and the non-dom rules in the non-dom guide. Your own tax adviser decides which applies to you.
8. Gifts and Inheritance
Cyprus has no inheritance tax and no gift tax. Moving a property for nothing still goes through the Land Registry, where the transfer fee is calculated on the value as of 1 January 2013: nil from parents to children, 0.1% between spouses and between third-degree relatives, and €50 to trustees. Gifts to these relatives are also exempt from capital gains tax. The Land Registry fees by relationship, probate and the heir's capital gains base are in our guide to Cyprus inheritance tax and gift tax.
FAQ: Cyprus Property Taxes
On a new-build, VAT of 19%, or 5% on a qualifying main home, and no transfer fees. On a resale, transfer fees of 3%, 5% and 8% by price band, halved, and no VAT. Stamp duty was abolished for contracts signed from 1 January 2026.
€8,600. The statutory bands give €17,200 (€2,550 + €4,250 + €10,400) and the fee is reduced by 50% when the purchase is not subject to VAT.
20% on the gain from selling Cyprus property, after inflation indexation of the cost and lifetime exemptions of €150,000 for a main home, €30,000 for any other property and €50,000 for agricultural land by a farmer, capped together at €150,000. A 0.4% levy on the sale proceeds is paid by the seller.
No. Tax rules apply equally to residents and non-residents.
No. But if you qualify for 5% reduced rate, the savings are significant.
The state tax was abolished in 2017. Municipalities still charge their own annual property tax and fees: roughly €76 to €105 a year on a €300,000 valuation in the four municipalities we checked (as of October 2026), plus sewerage, refuse and communal charges.
No inheritance tax exists in Cyprus, and a gift or inheritance to a spouse, child or third-degree relative is exempt from CGT. The Land Registry transfer fee on a free transfer is nil from parents to children and 0.1% between spouses and between third-degree relatives.
Not on the purchase. The 5% VAT rate is for individuals buying a main home, so a company pays 19%. A company is taxed on rent under the company tax rules instead of the personal bands. Ask a Cyprus tax adviser to compare before you choose a structure.
Why Work With Cyprus VIP Estates?
We don’t just sell exclusive villas and apartments — we guide you through every tax and legal aspect of your purchase.
Our team:
- Explains how each tax applies to your purchase and sale,
- Coordinates the purchase paperwork with your lawyer,
- Offers support in German, English, Polish and Russian,
- Connects you with legal and financial professionals on the island.
From first viewing to final signature — we’ve got your back.
Free PDF guide · PDF, English
The True Cost of Buying Property in Cyprus (2026)
Every tax, fee and running cost from reservation to keys, with a worked example
What is inside
- One-off costs at a glance: what you pay on top of the price, and when
- VAT on a new-build: the 5% and 19% rates, the limits and a worked example
- Transfer fee and stamp duty: what applies to a new-build and to a resale
- Legal fees, Land Registry charges, mortgage costs and currency exchange
