What are the property taxes in Cyprus?
The short answer: Cyprus has no annual property tax. You do not pay an equivalent of the Dutch OZB, the Belgian property tax, or the British council tax at the federal level.
What you do pay depends on the phase: buying, owning, renting or selling. The Cypriot Parliament approved Law No. 239(I)/2025 on 22 December 2025, bringing into effect the most far-reaching reform of the property tax system in almost a decade.
Significantly more favorable rules apply to buyers and sellers in 2026 than a year ago.
Overview: which tax at what time? (2026)
| Phase | Tax | Applicable |
|---|---|---|
| Buying (new build) | VAT 19% (or reduced by 5%) | First delivery by developer |
| Buying (resale) | Transfer costs 3–8% | Land Registry registration (50% discount) |
| Buy (both) | Stamp duty | Abolished as of Jan 1, 2026 |
| Possess | No annual tax | – |
| Rent out | Income tax 0–35% | Based on net rental income |
| To sell | CBT 20% | Based on net profit, with exemptions |
1. VAT on the purchase of new construction
VAT applies exclusively to the first purchase of new real estate directly from a developer. Resale is always VAT-exempt.
Standard rate: 19%
This applies to:
- All commercial real estate purchases
- New-build homes above the exemption threshold
- Purchases by companies (no reduced rate available)
Reduced rate: 5%
The reduced VAT rate of 5% is available for the purchase of a new primary residence, provided that all of the following conditions are met: the value of the property does not exceed €350,000, the total transaction value does not exceed €475,000, the total built-up interior area does not exceed 190 m², and the property is used as the buyer's first and principal residence in Cyprus.
In practice: the first 130 m² are taxed at the reduced rate of 5%; any additional surface area (from 131 m² to 190 m²) is taxed at the standard rate of 19%.
Please note: for real estate with building permits issued before 31 October 2023, a transitional measure applies: the reduced VAT rate of 5% applies to the first 200 m², regardless of the total surface area or value, provided that the purchase as a primary residence is completed before 15 June 2026.
Repayment: If you sell or rent out the property within 10 years while having benefited from the 5% rate, you are required to repay the difference compared to the 19% rate, pro rata to the remaining period.
2. Transfer Fees
Transfer costs are paid upon the registration of the title deed in your name at the Land Registry. They are calculated progressively based on the market value of the property as estimated by the Land Registry.
Tariff structure:
| Value disk | Rate |
|---|---|
| Up to €85,000 | 3% |
| €85.001 – €170.000 | 5% |
| Above €170,000 | 8% |
Discounts:
- New construction (VAT paid): no transfer costs
- Resale (no VAT): 50% discount on the calculated transfer costs
- Joint purchase: the value is divided among the buyers, which, due to the progressive nature, leads to a lower total bill.
On a resale apartment of €250,000 in Limassol, the transfer costs after a 50% discount amount to approximately €6,600: €85,000 × 3% = €2,550, plus €85,000 × 5% = €4,250, plus €80,000 × 8% = €6,400, totaling €13,200 before discount, €6,600 after discount.
3. Stamp duty: abolished
Contracts signed from 1 January 2026 are fully exempt from stamp duty.
Previously, this amounted to 0.15% on the first €170,000 and 0.20% above that, with a maximum of €20,000. For a real estate contract of €300,000, that was €407.50. A small amount, but now simply zero.
Transition rule: contracts signed before 31 December 2025 but not yet settled are subject to the old rates. Check this if you have an ongoing transaction.
4. No annual property tax
Cyprus abolished the national Immovable Property Tax (IPT) in 2017. There is no replacement at the national level. As an owner, you only pay annually:
- Municipal levies: vary significantly by municipality, typically €100–€500/year for an average home, for sewage charges, waste collection, and street lighting.
- Insurance: approximately €40–€80/month for an apartment/villa
- Service charges: for apartments or gated communities, for common areas
5. Tax on rental income
Rental income is taxed progressively as personal income. For Cyprus residents, the standard income tax brackets apply (first €22,000 tax-free, above that 20% – 35%).
Important 2026 update: the Special Defence Contribution (SDC) on rental income has been completely abolished for tax residents. If you own property in Cyprus and rent it out, this eliminates a levy that previously applied to 3% of 75% of gross rental income.
For Non-Dom residents : you are exempt from SDC by definition, so this change confirms a benefit you already had. You pay income tax on rental income above €22,000 per year.
Practical structure: renting out real estate via a Cyprus Ltd sometimes has advantages (deduction of costs, lower effective tax rate via dividend distribution), but requires customization; the 2026 changes make this more complex than it seems.
6. Capital Gains Tax (CGT) on sale
Rate: 20% on the net realized profit on the sale of:
- Real estate located in Cyprus
- Shares in companies of which more than 20% of the value is directly or indirectly derived from Cypriot real estate
As of January 1, 2026, the threshold for indirect disposals has been tightened from 50% to 20%, causing share sales in real estate holding structures to fall within the scope of CGT more quickly. This is a point that anyone with a holding structure owning Cypriot real estate must actively assess.
Deductible expenses in the profit calculation:
- Purchase price (indexed for inflation)
- Notary fees and transfer costs upon purchase
- Improvement costs (renovations, structural adjustments)
- Real estate agent fees on sale
- Legal costs
Lifetime exemptions (2026, updated):
The primary residence exemption increased from €85,430 to €150,000, the general exemption from €17,086 to €30,000, and the exemption for agricultural land from €25,629 to €50,000. These are cumulative lifetime exemptions; once used, they are not reset.
Concrete example: you buy a home as your primary residence for €400,000 and sell it 8 years later for €600,000. Net profit after costs: assume €175,000. After applying the primary residence exemption of €150,000, €25,000 remains taxable. Cost-benefit ratio: €5,000.
Corporations: do not have access to personal lifetime exemptions and pay 20% CGT on the entire net profit.
Total purchase costs: two scenarios
Scenario A: New-build apartment €300,000 (primary residence, <190 m²)
| Post | Amount |
|---|---|
| VAT 5% on the first 130 m² | ~€15.000 |
| Transfer costs | €0 (VAT paid) |
| Stamp duty | €0 (abolished 2026) |
| Legal costs (~1.5%) | ~€4.500 |
| Total additional costs | ~€19.500 (±6,5%) |
Scenario B: Resale of villa €500,000
| Post | Amount |
|---|---|
| VAT | €0 (resale) |
| Transfer costs (after 50% discount) | ~€16.600 |
| Stamp duty | €0 (abolished 2026) |
| Legal costs (~1.5%) | ~€7.500 |
| Total additional costs | ~€24.100 (±4,8%) |
Real estate and permanent residence permit
This is the part that most buyer-seekers overlook: purchasing real estate in Cyprus can also arrange your residency rights.
Via the Category F Permanent Residency by Investment route, a purchase of at least €300,000 (new build, VAT paid) entitles you to a fast-track permanent residence permit for you and your immediate family. Processing time: 2 – 3 months. No 183-day requirement for the right of residence itself (but there is for tax residency).
Combination most of our clients make: €300k–€500k new build in Paphos or Limassol → permanent residence permit → tax residency (60 or 183 days) → Non-Dom status → 0% on dividends, 0% inheritance tax, 8% crypto.
Frequently Asked Questions about Property (Transfer) Tax in Cyprus
Is there an annual property tax in Cyprus? No. The national Immovable Property Tax was abolished in 2017. You only pay local municipal levies (sewerage, waste, lighting), typically €100 – €500 per year.
Do I pay VAT if I buy a resale home? No. VAT applies exclusively to new construction (first delivery by the developer).
What are the transfer costs for a resale home of €400,000? Calculation: 3% × €85,000 = €2,550 + 5% × €85,000 = €4,250 + 8% × €230,000 = €18,400. Total: €25,200, after 50% discount = €12,600.
Do I have to pay CGT if I sell my primary residence? Yes, but you are entitled to a lifelong exemption of €150,000 on the profit. Above that, you pay 20% CGT on the remaining net profit.
What has changed for real estate tax in 2026? Stamp duty completely abolished for contracts from 1 January 2026. CGT exemptions nearly doubled. SDC on rental income abolished. The 20% threshold for real estate holding companies lowered to 20%.
Can I freely buy real estate in Cyprus as a foreigner? EU citizens: completely freely. Non-EU citizens: permission is required from the Council of Ministers, but this is a formality and is almost always granted for a single property.
