Cyprus offers a unique combination for real estate investors: no annual national property tax, no inheritance tax, no wealth tax, and for non-dom rental income, zero Special Defence Contribution. The 20% capital gains tax on property disposal is real but can be managed with the right structure and long holding periods.
Cyprus is the only EU country with no national annual property tax, no inheritance tax, and no wealth tax — making it one of the lowest-cost jurisdictions in Europe for long-term property holding.
This guide covers the full tax picture for real estate investors in Cyprus in 2026.
Capital Gains Tax on Cyprus Property: 20%
Cyprus applies 20% capital gains tax (CGT) on profits from:
- Disposal of immovable property located in Cyprus
- Disposal of shares in companies where value derives primarily from Cyprus immovable property
This applies to both residents and non-residents. There is no capital gains tax on shares in operating companies or other financial assets.
How CGT is Calculated
Sale price
- Original purchase price (adjusted for inflation via CPI)
- Qualifying improvement costs (receipts required)
- Transfer fees paid on original acquisition
- Legal fees on original acquisition
= Net gain
× 20% = CGT payable
Indexation for inflation significantly reduces the taxable gain on long-held properties. A property purchased in 2005 would have its base cost uplifted by the official Consumer Price Index from 2005 to the date of disposal.
Lifetime CGT Exemptions
| Exemption | Lifetime Limit |
|---|---|
| Primary residence (5+ years of occupation) | €85,430 |
| Agricultural land | €25,629 |
| Inherited property disposal | €85,430 |
These are lifetime totals across all qualifying disposals, not per-transaction amounts.
CGT-Free Transfers
- Gifts to spouse or children (CGT deferred to eventual disposal)
- Transfer on death/inheritance
- Reorganizations within group companies
- Gifts to charities or the government
Rental Income Tax for Non-Doms
| Tax | Non-Dom | Domiciled Resident |
|---|---|---|
| Income tax | Progressive 0–35% | Progressive 0–35% |
| Special Defence Contribution | 0% | 3% |
| GESY | 2.65% | 2.65% |
Example: €30,000 Annual Rental Income (Non-Dom vs Domiciled)
| Item | Non-Dom | Domiciled |
|---|---|---|
| Gross rental income | €30,000 | €30,000 |
| Deductible costs (repairs, management, mortgage interest) | €8,000 | €8,000 |
| Net taxable income | €22,000 | €22,000 |
| Income tax (within €22k threshold) | €0 | €0 |
| SDC | €0 | €900 (3%) |
| GESY (on gross) | €795 | €795 |
| Total tax | €795 | €1,695 |
GESY on rental income is reported and paid twice yearly: 30 June and 31 December, via TAXISnet.
VAT on New Property Purchases
When purchasing new property directly from a developer:
- Standard VAT rate: 19% on the purchase price
- Reduced rate: 5% on the first 200 sqm of a primary residence (applicant must not own other residential property in Cyprus, and must personally occupy the property)
When purchasing resale property (from another private owner):
- No VAT — transfer fees apply instead
Stamp duty on property purchase contracts (post-2026 reform): 0.15% on value up to €170,860; 0.20% above. Applied to the contract value at the Land Registry.
Transfer Fees at Land Registry (Resale Properties)
| Market Value Tranche | Transfer Fee Rate |
|---|---|
| Up to €85,430 | 3% |
| €85,431 – €170,860 | 5% |
| Above €170,860 | 8% |
Where VAT was paid on purchase (new property from developer), transfer fees are reduced by 50%.
Exemption: Transfers between spouses and first-degree relatives are transfer-fee exempt.
Personal vs Company Ownership
Personal Ownership
Pros: Simpler, lower annual compliance, access to €85,430 CGT lifetime exemption on primary residence, more straightforward mortgage financing.
Cons: Personal liability exposure; more complex for multiple properties or joint investors.
Cyprus Ltd Ownership
Pros: Asset protection, easier portfolio management via share transfers, deductible corporate expenses, more flexible for multiple investors.
Cons: Annual audit required (€1,000–2,500), corporate tax returns, HE32 filing, company secretary costs. Total annual compliance: €3,000–6,000.
Note: Shares in a Cyprus company that derives its value primarily from Cyprus property are subject to CGT on disposal — the company wrapper does not avoid CGT on real estate.
Find Cyprus real estate lawyers and company formation agents at CyprusDesk.
Annual Holding Costs
| Cost | Typical Range |
|---|---|
| Municipal property tax | 0.1–0.2% of 2013 valuation |
| Sewage tax | 0.05–0.3% of 2013 valuation |
| Communal services | €85–500/year |
| Buildings insurance | €200–800/year |
| Property management (if rented) | 5–15% of rental income |
| Accountant (if company structure) | €2,000–5,000/year |
By European comparison, Cyprus annual holding costs are minimal. France, for example, levies an annual taxe foncière of 0.5–1.5% of rental value, plus wealth tax (IFI) above €1.3M for French residents.
Cyprus Property Market: Key Areas
| Location | Investor Profile | Avg Price/sqm |
|---|---|---|
| Limassol city centre | Urban rental demand | €3,000–6,000 |
| Limassol marina/CBD | Luxury, HNW buyers | €5,000–12,000+ |
| Paphos | Holiday rental, retirees | €1,800–3,500 |
| Nicosia | Local residential/commercial | €1,500–3,000 |
| Larnaca | Growth area | €1,500–2,800 |
| Protaras/Ayia Napa | Seasonal holiday let | €1,800–3,000 |
Key Numbers for Real Estate Investors
- Cyprus CGT on property disposal: 20%
- SDC on rental income (non-dom): 0%
- SDC on rental income (domiciled): 3%
- National annual property tax: 0% (abolished 2017)
- Inheritance tax: 0%
- Wealth tax: 0%
- VAT on new property from developer: 19% (5% primary residence relief)
For the full picture of the non-dom SDC exemption that eliminates SDC on rental income, see the Cyprus Non-Dom guide 2026. For the mechanics of Special Defence Contribution more broadly, see our SDC tax Cyprus guide.
Disclaimer: Property tax rules and exemptions vary significantly by individual circumstance. This article is informational only. Before investing, consult a qualified ICPAC-registered accountant and a Cyprus-licensed real estate lawyer. Find verified professionals at CyprusDesk.