Taxes on Real Estate in Cyprus – The 2025 Guide for Buyers & Investors
Buying real estate in Cyprus is an appealing move — whether you're investing, relocating, or acquiring a luxury property for personal use. However, to make an informed decision, you need a complete understanding of the taxes involved in the transaction and beyond.
In this updated guide, we explain everything you need to know about property taxes in Cyprus in 2025 — from VAT and transfer fees to capital gains, rental income tax, and more.
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% | For up to 130–200 sq.m, 1st-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
Transfer fees apply when the title deed is transferred to the new owner — typically for resale properties.
| Property Value (€) | Rate (%) |
|---|---|
| Up to 85,000 | 3% |
| 85,001 – 170,000 | 5% |
| Over 170,000 | 8% |
Good to know:
- No transfer fees apply when VAT is already paid.
- 50% discount if the sale is not VAT-applicable.
- For joint ownership (e.g., spouses), fees are split and reduced.
3. Stamp Duty
Stamp duty on the sale agreement is typically the responsibility of the buyer.
| Property Value (€) | Stamp Duty Rate |
|---|---|
| Up to 5,000 | 0% |
| 5,001 – 170,000 | 0.15% |
| Over 170,000 | 0.20% |
| Maximum payable | €20,000 |
Deadline: Must be completed within 30 days of contract signing.
4. Capital Gains Tax (CGT)
CGT is charged only when selling a Cyprus-based property.
Flat rate: 20% on the net profit (sale price – purchase price – allowable expenses).
Exemptions & Allowances:
| Situation | Exemption Amount |
|---|---|
| Primary residence (5+ years) | €85,430 |
| Any other property (once per lifetime) | €17,086 |
| Agricultural land by farmer | €25,629 |
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 €19,500: 0%
- €19,501 – €28,000: 20%
- €28,001 – €36,300: 25%
- €36,301 – €60,000: 30%
- €60,000+: 35%
Allowable deductions include:
- Maintenance costs,
- Management fees,
- Mortgage interest,
- Property insurance.
At Cyprus VIP Estates, we assist clients in tax reporting, rental income optimization, and compliance.
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,
- You can offset taxes paid in Cyprus.
Consult your local tax advisor for country-specific implications.
7. Tax Residency & Annual Property Tax
- No annual property tax has existed in Cyprus since 2017.
- But if you stay more than 183 days per year, you may become a Cyprus tax resident — and benefit from non-dom regime for 17 years (no tax on foreign dividends or interest).
We help international clients understand and optimize their residency status and legal obligations.
FAQ: Cyprus Property Taxes
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:
- Navigates Cyprus’ tax regulations for you,
- Assists with paperwork, declarations and planning,
- 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.
