Property Taxes in Cyprus in 2026: A Complete Guide for Buyers

Property Taxes in Cyprus in 2026: A Complete Guide for Buyers

Understanding taxes is one of the key factors when purchasing property in Cyprus. The good news is that the system here is quite transparent, and in 2026 it became even simpler. Let's break down all the taxes that are important to consider.

1. VAT — The Main Tax When Purchasing

VAT applies only to the purchase of new properties.

• 5% — reduced rate (if conditions are met)
• 19% — standard rate

How VAT Works in 2026

The system is based on limits and is divided into 3 levels:

• 1. Full Exemption (5%)
  up to 130 m²
  value up to €350,000
  👉 In this case, 5% applies to the entire property value.
• 2. Combined Rate (most common scenario)
  If the property exceeds:
  
  • 130 m² or
  • €350,000
  BUT remains within:
  
  • up to 190 m²
  • up to €475,000
  👉 Then it applies:
  5% — on the part (within the exemption)
  19% — on the excess
  ✔ The right to the reduced rate is NOT completely lost.
• 3. Complete Loss of Exemption
  If at least one of the conditions is exceeded:
  
  • area over 190 m²
  • value over €475,000
  👉 Then:
  ❗ 5% is completely annulled
  ❗ 19% applies to the entire property value

Important to Understand

• 👉 130 m² and €350,000 are not "breaking points" but exemption limits
• 👉 The critical threshold is 190 m² and €475,000
• 👉 Up to these values, the exemption can be partially retained

This is one of the most important points when choosing a property, as it directly affects the final purchase price.

Example (simplified)

• Property: €400,000, 150 m²
  5% — on the part within the exemption
  19% — on the excess
  👉 Result: combined rate (part at 5%, part at 19%)
• Property: €520,000 or 200 m²
  exceeded maximum limits
  👉 Result: 19% on the entire value
  (The exact calculation depends on the property parameters — we provide a personal calculation for each case.)

2. Transfer Fees

Applies only to the purchase of secondary properties (resale).

Rates (considering a 50% discount):
approximately from 1.5% to 4%

Important:
👉 if you are buying a new property with VAT — this tax = 0

3. Stamp Duty — Abolished

As of January 1, 2026, stamp duty has been abolished.
This means:
fewer expenses
simpler transaction process

4. Annual Property Taxes

There is no annual property tax for individuals in Cyprus.
This is one of the key advantages compared to other European countries.

5. Rental Income Tax

If you rent out property:
income tax (PIT) applies
a contribution to the healthcare system (GHS) is collected

Important:
👉 as of 2026, SDC (defense fund tax) on rental income has been abolished
This makes investments more profitable.

6. Tax on Property Sale

When selling, capital gains tax may apply:
rate — 20%
But:
there are exemptions
expenses are considered
benefits may apply

Conclusion

The tax system in Cyprus in 2026 is:
transparent
predictable
beneficial for investors

Especially important:
there is no annual property tax
stamp duty has been abolished
tax burden on rental income has been reduced

FAQ

1. What tax do I need to pay when buying a new property in Cyprus?
You need to pay VAT, which is 5% or 19% depending on the value and area of the property.

2. Is there an annual property tax for individuals in Cyprus?
No, there is no annual property tax for individuals in Cyprus.

3. What tax applies when selling property?
When selling, capital gains tax may apply with a rate of 20%.

4. What are Transfer Fees and how are they calculated?
Transfer Fees are the property transfer tax that applies only to the purchase of secondary properties and ranges from 1.5% to 4% with a discount.

5. How will the abolition of stamp duty affect the buying process?
The abolition of stamp duty will simplify the transaction process and reduce costs when purchasing property.