Cyprus Property Taxes: Ownership and Sale

Owning property in Cyprus carries a different set of tax obligations from buying it. Once you hold a property, the main costs to plan for are Capital Gains Tax if you sell, income tax on any rental income, and small municipal charges — Cyprus has not levied an annual property tax since 2017. If you are still weighing up purchase costs such as VAT and Land Registry transfer fees, see our full guide to property buying costs in Cyprus; if VAT specifically is your focus, our VAT rules and deadline guide covers the reduced-rate and transitional regimes in detail.

Capital Gains Tax on Selling Property in Cyprus

Cyprus applies Capital Gains Tax (CGT) of 20% on the profit made when selling immovable property located in Cyprus. The taxable gain is calculated as the sale price less the original acquisition cost (adjusted for inflation), the cost of any capital improvements, and allowable deductions such as transfer fees or legal fees paid on acquisition and agency commission paid on sale. A package of lifetime exemptions, increased under the 2026 reform, is available to reduce the taxable amount:

These are lifetime allowances, not annual ones, and each seller can normally use only one category of exemption against a given disposal. The reform also lowered the threshold for the "property-rich company" rule — which brings shares in companies whose value is mostly derived from Cyprus property within the scope of CGT — from 50% to 20% of company assets.

Worked example: a seller disposes of an investment apartment (not their main residence) for a net gain of €120,000, having made no previous use of their general lifetime allowance.

A seller disposing of their sole main residence, and eligible for the residence exemption instead, would apply up to €150,000 against the gain rather than €30,000, which removes CGT liability entirely for most typical home sales. The calculation starts from the original purchase price (or a specified valuation date for property held long-term), plus verifiable capital expenditure on improvements, plus incidental acquisition costs. Because the calculation involves historic costs and indexation, sellers should request a formal CGT calculation from the Tax Department or a licensed accountant before completing a sale, rather than relying on an estimate. Full guidance and rulings are published by the Cyprus Tax Department.

Income Tax on Rental Income

Rental income earned from Cyprus property is taxed as part of the owner's normal income under the progressive personal income tax scale, alongside the General Healthcare System (GHS) contribution, which applies to rental income as it does to other income categories. As part of the 2026 reform, the Special Contribution for Defence (SDC) on rental income — previously charged at an effective rate of around 2.25% on top of income tax — has been abolished, simplifying the tax position for landlords. The same reform reduced SDC on dividend income from 17% to 5%, though that applies to investment income rather than rental income specifically.

Because income tax is charged on a progressive scale with allowable deductions (such as a percentage for wear and tear, and any deductible expenses relating to the property), the exact liability depends on the owner's total income and personal circumstances, and is best confirmed with a Cyprus tax advisor or directly through the Cyprus Tax Department.

Who These Taxes Apply To

CGT on Cyprus property applies regardless of the seller's tax residency status, since the tax is charged by reference to the location of the property rather than where the owner lives. Rental income tax and GHS contributions likewise apply to rental income generated by a Cyprus property, though the precise treatment can vary for non-resident owners depending on double tax treaties between Cyprus and the owner's country of residence. Non-resident landlords should check their position both with a Cyprus tax advisor and in their home country, since rental income may also need to be declared there.

Declaring and Paying These Taxes

CGT is not withheld automatically at the point of sale. The seller is responsible for calculating the liability and submitting the relevant return to the Cyprus Tax Department within the statutory deadline once the transfer is completed. In practice, most sellers instruct their accountant or lawyer to prepare the CGT calculation alongside the transfer paperwork at the Land Registry, since the two processes typically happen around the same time. Keeping records of the original purchase contract, transfer fee receipts, legal fees, and any invoices for capital improvements from the time of purchase onward makes this considerably faster when the time comes to sell.

Landlords are required to register with the Cyprus Tax Department and file an annual personal income tax return declaring rental income alongside any other income they receive. This applies whether the property is let long-term to tenants or through short-term holiday rental platforms, though short-term letting can bring additional local licensing requirements that sit outside the scope of this tax guide. Keeping a simple record of rent received and deductible expenses through the year, rather than reconstructing it at filing time, is the easiest way to stay on top of the annual return.

No Annual Property Tax Since 2017

Cyprus abolished its annual Immovable Property Tax with effect from 1 January 2017. There is currently no recurring national tax simply for owning property in Cyprus, regardless of the property's value. This is a common point of confusion for buyers comparing Cyprus with other countries that do levy an annual property tax — in Cyprus, the only recurring charges are the municipal and communal fees described below.

Municipal and Communal Fees

Property owners in Cyprus pay modest recurring municipal and communal charges, generally in the range of €100 to €500 per year, covering services such as refuse collection and local infrastructure. The exact amount depends on the municipality and the size and value of the property. These are local service charges rather than a national tax, and apartment owners typically also pay a separate building maintenance fee to their owners' association, set independently by each building's management. Budgeting for these ongoing costs alongside the one-off purchase costs covered in our buying costs guide gives a complete picture of property ownership costs in Cyprus.

This information is accurate as of August 2026 and is provided for general guidance only. It does not constitute legal or tax advice — please confirm details with our team or the relevant authority.