The taxes you actually pay
Cyprus's property tax framework is simpler than the UK or US but has several moving parts. The taxes that hit Cyprus property fall into five categories: transaction taxes (paid once, at purchase), holding taxes (paid annually while you own), income taxes (paid on rental income), exit taxes (paid when you sell), and inheritance considerations (paid when ownership transfers at death). Importantly, the annual immovable property tax (IPT) no longer applies, which is one of the lowest-friction parts of the system: there is no headline annual property tax in Cyprus, only municipal charges. This guide covers each category in detail with 2026 rates. The single most important thing to know up front: most of the buyer taxes are heavily dependent on whether the property is brand new (carries VAT) or resale (carries transfer fees), so the choice between new and resale has tax implications beyond the obvious.
VAT on new-build property
Cyprus charges 19% VAT on new-build residential property, the standard EU rate. For first-time buyers using the property as their primary residence, a reduced rate of 5% VAT applies to the first 130 m² of buildable area (130 m² of building, not plot), on value up to €350,000, provided the home's total buildable area does not exceed 190 m² and its total value does not exceed €475,000 (above €350,000, only the first €350,000 gets the 5% rate). The reduced rate is the single biggest tax saving available to Cyprus property buyers: on a €300,000 apartment, the difference between 19% and 5% VAT is €42,000 (for a home up to 130 m²). To qualify, the home must be your main and permanent residence in the Republic, and the area and value limits above must be met (Tax Department Circular EE 11/2023). Applications and permits filed by 31 October 2023 keep the earlier 200 m² area limit, disabled persons get 190 m² and families get an additional 15 m² per child beyond three. If you already used the 5% rate on another home you can use it again, but you must pay the difference between 5% and the standard rate for the months the earlier home was not your residence. If you later stop using the home as your residence, you must notify the Tax Commissioner within 30 days and pay the VAT difference for each calendar month it was not your residence; there is no repayment when the home passes on death or to an adult child who is a beneficiary and has not used the right in the last ten years. The buyer files a signed declaration, with the planning permit and application, with the Tax Department, which examines it once complete; processing times are not published. Confirm your own eligibility with your lawyer before signing.
Interactive tool
Estimate your Cyprus tax saving
Compare your current country's tax burden against Cyprus Non-Dom. Live, no sign-up.
Your details
Tax comparison
| Item | UK | Cyprus Standard | Cyprus Non-Dom |
|---|---|---|---|
| Gross income | €80,000 | €80,000 | €80,000 |
| Income tax | €17,480 | €16,300 | €16,300 |
| Social insurance / GeSY | €3,611 | €8,184 | €8,184 |
| Total tax | €21,091 | €24,484 | €24,484 |
| Effective rate | 26.4% | 30.6% | 30.6% |
| Est. annual saving | n/a | €-3,393 | €-3,393 |
Transfer fees on resale property
Resale properties do not carry VAT; instead, the buyer pays transfer fees to the Land Registry. The scale is 3% on the first €85,000, 5% on €85,001 to €170,000 and 8% above that, and a 50% reduction applies, giving effective rates of 1.5%, 2.5% and 4%. A €300,000 resale therefore carries €8,600 in transfer fees (€17,200 before the reduction). When your purchase is subject to VAT, such as buying new from a developer, there are no transfer fees at all. Buying a resale home pays the scale above with the 50% reduction, even if the first owner paid VAT.
Miscellaneous fees (stamp duty abolished)
Stamp duty on property purchase contracts was abolished from 1 January 2026; documents signed up to 31 December 2025 remain subject to duty. Land Registry filing and registration fees remain; see the fee table on the Department of Lands and Surveys portal for the current amounts. Legal fees are not a tax but should be budgeted alongside them: quotes of around 1% to 1.5% of the price plus VAT are common, so get written quotes and check the Cyprus Bar Association scale. Non-EU buyers need a Council of Ministers permit and, for residency routes, a residency application, both of which carry government fees; check the current amounts with the Civil Registry and Migration Department. Bank charges for international wire transfers vary by bank and route, so ask your bank. As a guide, a resale at €300,000 costs around €11,000 to €13,000 including the transfer fee of about €8,600, legal fees and small fees, roughly 3% to 4% of the price. A new build with reduced VAT costs the 5% VAT plus legal and small fees.
Municipal taxes and ongoing holding costs
Annual property holding costs in Cyprus are modest. The national immovable property tax (IPT) no longer applies, so there is no equivalent of the UK Council Tax or US property tax at the national level. What you pay each year is: (1) Municipal property tax, levied by your local municipality. (2) Sewerage charges, set locally. (3) Refuse collection charges, set locally. Rates and tariffs vary by municipality and are not set nationally, so ask your municipality for the current tariff for your property before you buy. (4) Communal common-area charges (kinochrista) if your unit is in a development with shared facilities. These are paid to the management committee, not the government, but feel like a tax: the amount depends on the pool, gym, lifts and security, so ask the committee for the current budget. Communal charges usually drive most of the variation in annual holding cost.
Rental income tax
Rental income from Cyprus property is taxable to Cyprus tax residents at their personal income tax rates (0% on the first €22,000; 20% on €22,001–€32,000; 25% on €32,001–€42,000; 30% on €42,001–€72,000; 35% above €72,000), with several allowances. A deemed 20% allowance is available against gross rental income for maintenance, so only 80% of gross rent is taxable, and mortgage interest on the property can be deducted. Other deductions depend on the property and your circumstances, so confirm them with a Cyprus tax adviser. The 3% Special Defence Contribution (SDC) on rental income was abolished from 1 January 2026; GeSY contributions on rental income may still apply, so check with your accountant. Non-residents are also taxed on Cyprus-source rent through an annual return; see /guides/rental-income-tax-cyprus/ for the detail. Short-term rentals (Airbnb / holiday lets) follow the same tax rules but require a tourism licence from the Deputy Ministry of Tourism, and operating without one is penalised.
Capital gains tax when you sell
Cyprus capital gains tax (CGT) applies only to gains on Cypriot real estate (or shares in companies holding Cypriot real estate). The flat rate is 20% on the realised gain. Several reliefs apply. From 1 January 2026 (Law 242(I)/2025 amending Law 52/1980) the lifetime exemptions are €30,000 (general), €50,000 (agricultural land sold by a farmer whose main occupation is agriculture) and €150,000 on disposal of your main residence. Only one applies, the larger; they are not cumulative. Main residence conditions: you must have lived in it, exclusively as your home, for at least 5 years in total; if the plot is larger than 1.5 donum (dekari), the share of the gain from the extra land is taxed; the period is 10 years if it is a second or later such disposal; no relief applies if more than 1 year has passed since you stopped living there. Tax applies only to the gain above €150,000. Confirm the procedure for 2026 with the Tax Department or your adviser. The original cost is adjusted for inflation since purchase, and documented improvements are added to the cost, both of which reduce the taxable gain. CGT is assessed by the Tax Department on a declaration filed after the sale, and sellers cannot avoid it by leaving Cyprus. Transfers to certain family members are generally exempt; confirm the conditions with the Tax Department or your adviser. Gains on foreign property held by Cyprus tax residents are completely exempt from Cyprus CGT, regardless of size, one of the most generous CGT positions in the EU and a meaningful benefit of becoming a Cyprus tax resident.
Inheritance and getting professional help
Cyprus abolished inheritance tax in 2000, so property passing to heirs at death is not subject to any Cypriot inheritance tax. The estate may still face inheritance tax in the deceased's country of domicile (for example, UK inheritance tax can still apply to Cyprus property if the deceased was UK-domiciled), which is why high-net-worth relocators should usually update their will and consider whether to claim non-domicile status in their prior country. Cyprus succession law applies to the property: by default, Cyprus follows EU Regulation 650/2012 (Brussels IV), meaning any person can elect the law of their nationality to govern their estate in their will, which avoids forced-heirship complications. The practical recommendation: always use a Cyprus tax-qualified accountant for ongoing rental and CGT positions, and a property lawyer for any sale; the costs are small relative to the tax savings and the audit risk avoided. Cyprus property taxation rules have evolved meaningfully in the last decade and this guide reflects 2026 settings, so verify any specific figure with a professional before relying on it for a decision.