Cyprus Insights/Legal & Tax Insights
Taxes on Real Estate in Cyprus – The 2026 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 2026 — 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.
→ Browse current investment properties in Cyprus with strong resale and rental potential
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).
Check All Villas in Cyprus for Sale here.
We help international clients understand and optimize their residency status and legal obligations.
FAQ: Cyprus Property Taxes
No. Tax rules apply equally to residents and non-residents.
No. But if you qualify for 5% reduced rate, the savings are significant.
Not since 2017 — abolished by the government.
Inheritance is exempt from CGT, but transfer fees may still apply.
Sometimes — but individuals benefit from more exemptions. Talk to a tax advisor.
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.
