When purchasing property in Cyprus, understanding the island’s tax landscape is just as crucial as choosing the right home. Whether you’re a local resident or a foreign investor eyeing the Mediterranean lifestyle, taxes can significantly impact your total costs — and compliance is key to avoiding future legal and financial surprises.
This guide walks you through every relevant tax and fee associated with buying, owning, and selling property in Cyprus as of 2025. From VAT and stamp duty to local municipality rates and capital gains tax, we break down what you need to know in simple, plain English — no legal jargon. Plus, we’ll highlight changes to abolished taxes like Immovable Property Tax (IPT) and offer practical tips to help you plan smarter.
Whether you’re preparing to invest, relocate, or simply want clarity, this article gives you the full picture.
Overview of Property Taxes in Cyprus
Cyprus has made significant strides in simplifying its property tax regime over the last decade. Many taxes that once burdened property owners have been phased out, while others remain key components of any real estate transaction.
Here’s a snapshot of what buyers and sellers must consider:
- Active Taxes: These include stamp duty, Value Added Tax (VAT) on new properties, transfer fees charged by the Cyprus Land Registry, and Capital Gains Tax (CGT) on profits from sales.
- Local Municipality Taxes: Depending on the location of your property, you’ll also be liable for yearly contributions to cover services like waste collection and public lighting.
- Abolished Taxes: The once-controversial Immovable Property Tax was abolished in 2017, while Inheritance Tax was eliminated even earlier, in 2000.
Each of these tax components has its own calculation method, eligibility rules, and exemptions — which we’ll explore in the following sections. For foreign buyers in particular, understanding these obligations early can help streamline the process and avoid costly oversights.
Stamp Duty on Property Purchases in Cyprus
Stamp duty is one of the first taxes a buyer encounters during the property acquisition process in Cyprus. It’s a government charge applied to the purchase agreement and is mandatory for registering the contract with the Cyprus Tax Department. While it may seem like a small percentage, it can add up significantly, especially on high-value transactions.
When Is Stamp Duty Payable?
Stamp duty must be paid within 30 days of signing the purchase contract. It’s typically the buyer’s responsibility and is calculated based on the declared purchase price.
Stamp Duty Rates in 2025
Cyprus applies a tiered rate system:
- 0% for the first €5,000
- 0.15% for the portion between €5,001 and €170,000
- 0.20% for any amount exceeding €170,000
- The maximum total stamp duty is capped at €20,000 per agreement
Example Calculation
Let’s say you purchase a property for €250,000:
- First €5,000: 0% → €0
- Next €165,000: 0.15% → €247.50
- Remaining €80,000: 0.20% → €160.00
Total Stamp Duty: €407.50
This amount must be paid directly to the Inland Revenue Department before lodging the agreement with the Land Registry.
Special Cases and Exemptions
- Gifts of property (e.g., from parent to child) may be exempt
- Company share transfers involving property ownership may fall under different rules
Paying stamp duty on time is crucial for avoiding penalties and ensuring the contract is legally enforceable.
VAT on Property Purchases in Cyprus
Value Added Tax (VAT) is another key cost to factor in when buying property in Cyprus — but unlike stamp duty, VAT doesn’t apply to all properties. It’s only charged on new properties purchased from a developer, not on resale homes.
Standard VAT Rate
As of 2025, the standard VAT rate in Cyprus is 19%. This is applied to the purchase price of new, unused properties — meaning homes that are being sold for the first time, typically off-plan or recently completed.
Reduced 5% VAT Rate for Main Residences
Cyprus offers a generous incentive for buyers who intend to use the property as their primary and permanent residence. If you qualify, you may benefit from a reduced VAT rate of 5%, but only on the first 200 m² of the home’s covered area.
To qualify, you must:
- Be an individual (not a company)
- Live in the property as your main home for at least 10 years
- Not own another main residence in Cyprus
- Apply formally through the Tax Department, providing documents that prove your intent
Important Note: If the property exceeds 200 m², the portion above that size is taxed at the full 19% rate.
New vs. Resale Properties
- New properties → VAT applicable
- Resale properties → No VAT, but transfer fees apply
This distinction significantly affects your upfront cost. In many cases, choosing a resale property (which is VAT-free) may appear cheaper — but newer homes may offer better energy ratings or developer warranties.
Transfer Fees by the Cyprus Land Registry
Transfer fees are another essential cost when purchasing a property in Cyprus — they are charged by the Cyprus Land Registry when the property’s title deed is transferred into the buyer’s name. Unlike VAT or stamp duty, these fees are not applied at the contract stage but are payable on the day of title registration.
Who Pays the Transfer Fees?
The buyer is responsible for these fees, and they are calculated based on the property’s market value as assessed by the Land Registry at the time of the transfer — not necessarily the price listed in the purchase agreement.
Standard Transfer Fee Rates
The following tiered structure applies to individual buyers:
- 3% on the first €85,000 of the property’s value
- 5% on the amount between €85,001–€170,000
- 8% on any amount exceeding €170,000
50% Discount for All Transfers
Since recent tax reforms, Cyprus offers a 50% discount on transfer fees for most transactions, dramatically reducing the burden on property buyers.
For example, a property worth €250,000 would normally generate:
- €85,000 × 3% = €2,550
- €85,000 × 5% = €4,250
- €80,000 × 8% = €6,400
Total (before discount): €13,200 → You pay only €6,600
VAT vs. Transfer Fees
If VAT is paid on the property (i.e., on new-builds), you are exempt from paying transfer fees altogether. This rule is especially relevant for off-plan buyers and can significantly reduce the total acquisition cost.
Local Authority Taxes and Municipal Rates
Beyond national-level taxes, property owners in Cyprus are also subject to local authority charges, which are annual fees collected by either the Municipality or Village Council in which the property is located. These taxes fund essential services and are typically based on the value or size of the property.
What Do Local Taxes Cover?
These charges help support community-level infrastructure and services such as:
- Sewage and waste collection
- Street cleaning and lighting
- Public space maintenance
- Basic environmental or health-related services
How Much Should You Expect to Pay?
Annual local property taxes vary by location and property characteristics, but the general range is:
- €90 to €300 per year for most standard residential properties
- Higher amounts may apply to luxury villas or large commercial real estate
Each municipality sets its own rates, so costs can differ even between neighboring areas. The calculation is typically based on either the 1980 property value index or covered square meterage, depending on the local authority’s method.
When and How Are They Paid?
You’ll usually receive a bill once per year, sent by the local authority. Payments can often be made:
- Online via the municipal portal
- In person at the town hall or district office
- Through authorized banks
Responsibility of the Owner
These taxes are the responsibility of the registered property owner as per the title deed. If you are buying a resale home, make sure there are no outstanding dues prior to transfer — this should be part of your legal due diligence.
Capital Gains Tax When Selling Property in Cyprus
If you’re planning to sell a property in Cyprus, understanding Capital Gains Tax (CGT) is crucial. This tax applies to the profit you make when selling a property, and while it doesn’t affect buyers directly, it’s essential knowledge for long-term planning.
Who Pays Capital Gains Tax?
The seller is liable to pay CGT if a property is sold at a profit. The tax is imposed on the net gain from the sale — meaning the difference between the purchase price and the selling price, adjusted for certain allowable deductions.
CGT Rate in 2025
- A flat 20% rate is applied to taxable gains.
What Deductions Are Allowed?
To reduce the taxable gain, sellers can deduct:
- Original purchase price
- Transfer fees and stamp duty paid at the time of purchase
- Inflationary adjustments over the holding period
- Improvement costs (e.g., major renovations, structural changes)
- Professional fees (legal, architectural, etc.)
Lifetime Exemptions
Cyprus offers personal lifetime exemptions for residents and citizens, including:
- €17,086 general lifetime exemption
- €85,430 if the property was the seller’s main residence for 5+ years
- €25,629 on agricultural land (subject to specific use cases)
Only one exemption can be used per transaction, and each applies only once in a lifetime.
When and How to Pay
CGT is declared and paid at the Tax Department upon submission of the sales documents. It’s the seller’s responsibility to ensure accurate reporting and payment.
Other Taxes and Fees to Be Aware Of
In addition to the primary taxes (VAT, stamp duty, transfer fees, and CGT), buyers and sellers in Cyprus should be aware of several smaller but important costs that can arise during the property transaction process. While not always categorized as taxes, these fees can impact your budget and planning.
Power of Attorney (PoA) Stamp Duty
If you’re unable to be in Cyprus to sign documents in person, you may grant Power of Attorney to your lawyer or agent. This document must be stamped by the tax office.
- General PoA: €6 stamp duty
- Specific (limited) PoA: €2 stamp duty
This is a one-time charge paid when the PoA document is registered.
Title Deed and Registration Fees
Though transfer fees cover ownership change, additional Land Registry charges may apply for:
- Lodging contracts or deeds
- Issuing certified copies
- Updating property records
These fees are modest (typically €5–€50) but should be budgeted for, especially in resale purchases.
Legal and Professional Fees
- Lawyers typically charge a flat fee or percentage of the transaction value (e.g., 1%)
- Real estate agents may charge up to 5% + VAT of the sale price (paid by seller)
Ensure your professional fees are clearly stated in advance and included in any financial planning.
Property Insurance Costs
Although not a tax, insurance is often required by lenders or recommended for owners, particularly in apartment complexes. Costs vary depending on:
- Property size and age
- Type of coverage (fire, flood, theft)
- Insurer policies
Expect to pay between €150–€500 annually, depending on risk and coverage scope.
Communal Charges and Service Fees
If the property is part of a shared complex or gated community, there may be ongoing communal fees for:
- Pool and garden maintenance
- Security and management
- Repairs to shared areas
These charges are typically outlined in your sales contract and should be clarified with the developer or seller beforehand.
What’s No Longer Taxed: Inheritance and Immovable Property Tax
Cyprus has taken significant steps over the last two decades to simplify and reduce its property-related tax obligations. Two major taxes that once applied to owners and heirs have since been abolished, which is a strong incentive for long-term property investment on the island.
Immovable Property Tax (IPT) – Abolished Since 2017
Previously, property owners were required to pay an annual Immovable Property Tax based on the 1980 government-assessed value of their holdings. This tax applied cumulatively, meaning those with larger portfolios or higher-value properties paid progressively more.
As of January 1, 2017, IPT has been fully abolished, meaning:
- No annual tax is charged on owned real estate
- Applies to both individual and corporate property holders
- No declarations or payments are required going forward
This change significantly reduces the cost of owning property in Cyprus and simplifies annual financial reporting for residents and non-residents alike.
Inheritance Tax – Abolished Since 2000
Cyprus also eliminated its Inheritance Tax decades ago, removing a key financial burden from families passing down property.
- Effective from January 1, 2000
- No tax is payable by heirs on property or estate transfers
- Applies to all residents and non-residents
This tax-free transfer system has contributed to Cyprus’s appeal as a retirement and investment destination, especially among international buyers seeking to leave assets to children or spouses.
Note: While there is no inheritance tax, beneficiaries must still register the inherited property and update ownership at the Land Registry, which may incur standard administrative fees.
FAQ – Cyprus Property Taxes Answered
To help simplify the process for buyers and sellers, here are answers to some of the most commonly asked questions about property taxes in Cyprus:
Do I need to pay property tax every year in Cyprus?
No. Cyprus abolished Immovable Property Tax (IPT) in 2017, so there is no recurring annual national tax on property. However, local municipal taxes (e.g., for waste and sewerage) are charged yearly.
Is VAT always charged when buying a property in Cyprus?
Only new properties are subject to VAT. If you’re buying a resale home, you will not pay VAT — but you’ll need to pay transfer fees instead.
Can I reduce the VAT rate from 19% to 5%?
Yes — if you are purchasing a new property for use as your primary residence, you may qualify for a reduced 5% VAT rate (on the first 200 m²), subject to eligibility criteria and official application to the Tax Department.
How much are transfer fees and when are they paid?
Transfer fees are paid by the buyer at the Land Registry when the property is registered in their name. The fees range from 3% to 8%, depending on the property value, but you’ll receive a 50% discount under current rules. If VAT is applied, no transfer fees are due.
What taxes apply when I sell my property?
You’ll pay Capital Gains Tax (CGT) at a flat 20% rate on the net profit from the sale. You can deduct eligible costs and benefit from lifetime exemptions, including up to €85,430 if it was your primary home.
Are there any taxes for inheriting property in Cyprus?
No. Inheritance Tax was abolished in 2000. However, the new owner must formally register the inherited property with the Land Registry and pay minimal administrative fees.
Who pays stamp duty — and how much is it?
The buyer pays stamp duty when signing the purchase agreement. It ranges from 0.15% to 0.20%, with a cap of €20,000 per transaction.
1. Do I need to pay property tax every year in Cyprus?
No. Cyprus abolished Immovable Property Tax (IPT) in 2017, so there is no recurring annual national tax on property. However, local municipal taxes (e.g., for waste and sewerage) are charged yearly.
2. Is VAT always charged when buying a property in Cyprus?
Only new properties are subject to VAT. If you’re buying a resale home, you will not pay VAT — but you’ll need to pay transfer fees instead.
3. Can I reduce the VAT rate from 19% to 5%?
Yes — if you are purchasing a new property for use as your primary residence, you may qualify for a reduced 5% VAT rate (on the first 200 m²), subject to eligibility criteria and official application to the Tax Department.
4. How much are transfer fees and when are they paid?
Transfer fees are paid by the buyer at the Land Registry when the property is registered in their name. The fees range from 3% to 8%, depending on the property value, but you’ll receive a 50% discount under current rules. If VAT is applied, no transfer fees are due.
5. What taxes apply when I sell my property?
You’ll pay Capital Gains Tax (CGT) at a flat 20% rate on the net profit from the sale. You can deduct eligible costs and benefit from lifetime exemptions, including up to €85,430 if it was your primary home.
6. Are there any taxes for inheriting property in Cyprus?
No. Inheritance Tax was abolished in 2000. However, the new owner must formally register the inherited property with the Land Registry and pay minimal administrative fees.
7. Who pays stamp duty — and how much is it?
The buyer pays stamp duty when signing the purchase agreement. It ranges from 0.15% to 0.20%, with a cap of €20,000 per transaction.
Final Advice Before You Buy Property in Cyprus
Buying a property in Cyprus can be a rewarding investment — whether for lifestyle, retirement, or financial growth — but understanding the tax implications from the outset is essential to avoiding surprises and managing your budget.
Here are some key takeaways to help you plan with confidence:
- Factor in all taxes and fees upfront — not just the purchase price. VAT, stamp duty, legal costs, and local rates can add up.
- Work with a professional advisor or lawyer to confirm your eligibility for reduced VAT or exemptions on CGT.
- Use official tax calculators or consult with a licensed accountant to estimate your full outlay.
- Check for any unpaid municipal dues if purchasing a resale home — these follow the property, not the previous owner.
- Confirm that the property has a clean title deed to avoid delays and complications at the Land Registry.
Whether you’re a first-time buyer or an experienced investor, taking time to understand the tax landscape is key to a smooth, stress-free purchase.
Visit Our Showroom in Geroskipou
Ready to explore your next home in Cyprus?
We invite you to visit our showroom in Geroskipou, where our experienced team will guide you through our curated property selection and offer personalized advice on:
The Cyprus Permanent Residency Program (PRP) and how it aligns with your goals
Tax advantages, legal exemptions, and property-related fees
Smart investment opportunities with strong rental returns
Let Luma Developers be your trusted partner — from choosing the ideal property to navigating the legal process with ease.
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