Buyers and owners in Cyprus pay four main taxes on property: VAT (19%, or 5% on qualifying primary residences) on new builds, transfer fees (3%–8%, halved for most resales) at the Land Registry, capital gains tax (20%) when selling, and small annual municipal charges. Stamp duty, once part of this list, was abolished from 1 January 2026.
This guide walks through what each tax covers, who pays it, and how the rules changed under Cyprus’s 2026 tax reform, including the updated capital gains exemptions and the removal of stamp duty. It also covers what comes after the purchase: local municipal charges, rental income tax for buy-to-let owners, and the one-off costs that sit alongside these taxes at completion. The same rules apply whether the buyer already holds Cyprus residency, is relocating through the permanent residency route, or is holding the property as a long-term investment from abroad.
Overview of Property Taxes in Cyprus
As of 2026, four taxes remain active for anyone buying, owning or selling property in Cyprus: VAT, transfer fees, capital gains tax, and municipal charges. Stamp duty (long a fixture of every purchase contract) was abolished under the 2026 tax reform (Law 239(I)/2025), joining the annual Immovable Property Tax and Inheritance Tax on the list of taxes Cyprus no longer charges.
| Tax | Status in 2026 | Rate / range |
|---|---|---|
| VAT (new builds) | Active | 19%, or 5% on qualifying primary residences |
| Transfer fees (resales) | Active | 3%–8%, halved for most non-VAT purchases |
| Capital Gains Tax | Active | 20% flat rate on the net gain |
| Rental income tax | Active (for landlords) | Progressive personal income tax rates |
| Municipal / local charges | Active | Roughly €90–€300 per year |
| 0.4% property sale levy | Active | 0.4% of the sale price, on all disposals |
| Stamp duty | Abolished (contracts from 1 Jan 2026) | N/A |
| Immovable Property Tax (IPT) | Abolished (since 2017) | N/A |
| Inheritance Tax | Abolished (since 2000) | N/A |
Each of these has its own trigger, calculation method and exemptions, covered in detail below. The sections that follow start with the purchase-stage taxes (VAT, transfer fees, and what changed with stamp duty), then move to ownership and rental costs, and finish with what applies when the property is sold.
Is Stamp Duty Still Charged in Cyprus?
No. Stamp duty on property purchase contracts was abolished from 1 January 2026, under Law 239(I)/2025, confirmed by the Cyprus Tax Department. Contracts signed from that date carry no stamp duty at all, removing a cost that previously applied to every purchase agreement in Cyprus.
The change isn’t retroactive. Contracts signed on or before 31 December 2025 still follow the old stamp duty rules, even if completion happens later in 2026:
| Portion of purchase price | Old stamp duty rate |
|---|---|
| First €5,000 | 0% |
| €5,001 – €170,000 | 0.15% |
| Above €170,000 | 0.20% (capped at €20,000 per agreement) |
On a €250,000 purchase signed under the old rules, that worked out to €407.50 in total stamp duty (€0 + €247.50 + €160).
For anyone signing a new contract today, this cost no longer applies at all. It’s one of the more tangible, immediate savings from the 2026 reform, alongside the higher capital gains exemptions covered further down this guide.
VAT on Property Purchases in Cyprus
VAT is another key cost when buying property in Cyprus, but unlike stamp duty, it doesn’t apply to every purchase. It’s charged only on new properties bought from a developer, not on resale homes.
Standard VAT Rate
The standard VAT rate on new property in Cyprus is 19%, applied to the purchase price of homes being sold for the first time, typically off-plan or recently completed builds bought directly from a developer.
Reduced 5% VAT Rate for Main Residences
Buyers purchasing a property as their primary and permanent residence can qualify for a reduced VAT rate of 5% instead of 19%. Under the current rules, this applies to the first 130 m² of covered area, provided the total covered area doesn’t exceed 190 m², the property’s value doesn’t exceed €350,000, and the total transaction value stays under €475,000. Area or value above these thresholds is taxed at the standard 19% rate.
To qualify, the buyer must:
- Be an individual (not a company), aged 18 or over
- Use the property as their main and permanent residence
- Not have benefited from the reduced VAT rate on another property in the past 10 years
- Apply formally to the Tax Department before completion, with supporting documents
Buyers with disabilities can apply the reduced rate to the first 190 m², regardless of the property’s total area.
Transitional Rule for Older Building Permits
Properties where the planning permit application was filed on or before 31 October 2023 still qualify for the older, more generous rule: the reduced 5% VAT rate applies to the first 200 m² of covered area, regardless of the property’s total size or value.
The filing deadline for this transitional rule depends on when the building permit itself was issued. If it was issued on or before 31 December 2024, the declaration had to be filed by 15 June 2026, a deadline that has now passed. If the permit was issued from 1 January 2025 onward, or is still pending, Cyprus extended the deadline to 31 December 2026 (Law 109(I)/2026), to account for municipal permit delays. After the relevant deadline, only the current 130 m²/190 m² rule applies, even for these older permits.
New vs. Resale Properties
New properties carry VAT; resale properties don’t, but carry transfer fees instead. Resale can look cheaper upfront since it avoids VAT, though newer builds may offset that with better energy ratings or a developer warranty.
Transfer Fees by the Cyprus Land Registry
Transfer fees apply when a property’s title deed is registered in the buyer’s name, payable to the Cyprus Land Registry on the day of transfer, not at the contract stage like VAT or stamp duty.
Who Pays the Transfer Fees?
The buyer is responsible for these fees, calculated on the property’s market value as assessed by the Land Registry at the time of transfer, not necessarily the price stated in the purchase agreement. If more than one person buys the property, the price is divided between them for this calculation, so each buyer’s share falls into lower brackets individually, often reducing the combined fee compared with a single buyer paying the whole amount.
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
Cyprus applies a 50% discount on transfer fees for most transactions that don’t involve VAT, a significant reduction in cost for resale 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 → with the reduction, €6,600.
VAT vs. Transfer Fees
If VAT was already paid on the property (which applies to new-builds), no transfer fees are due at all. This is especially relevant for off-plan buyers and can meaningfully lower the total acquisition cost.
How Much Does It Actually Cost to Buy Property in Cyprus?
Since VAT, transfer fees and stamp duty apply differently depending on whether a property is new or resale, it helps to see the full picture side by side. Here’s what a €250,000 purchase actually costs in each scenario, on top of the price itself.
| Cost | New build (5% VAT, primary residence) | Resale property |
|---|---|---|
| VAT | €12,500 | €0 |
| Stamp duty | €0 (abolished) | €0 (abolished) |
| Transfer fees | €0 (exempt, VAT paid) | €6,600 (after 50% reduction) |
| Legal fees | €2,500–€5,000 | €2,500–€5,000 |
| Survey and other costs | €500–€1,000 | €500–€1,000 |
| Estimated total | €15,500–€18,500 | €9,600–€12,600 |
The gap between the two comes almost entirely from VAT: resale properties avoid it but carry transfer fees instead, while new-builds carry VAT but, since 2026, no longer add stamp duty on top. These are estimates; a lawyer can confirm exact costs once a specific property and its assessed value are known.
Local Authority Taxes and Municipal Rates
Property owners in Cyprus also pay local authority charges, annual fees set by the Municipality or Village Council where the property is located, funding community-level services.
What Do Local Taxes Cover?
These charges fund sewage and waste collection, street cleaning and lighting, public space maintenance, and basic environmental or health services.
How Much Should You Expect to Pay?
Annual local property taxes typically range from €90 to €300 for standard residential properties, with higher amounts for luxury villas or large commercial real estate. Each municipality sets its own rates (calculated either on the 1980 property value index or covered square meterage), so costs can differ even between neighbouring areas.
When and How Are They Paid?
Owners receive a bill once a year from the local authority, payable online through the municipal portal, in person at the town hall or district office, or through authorised banks.
Responsibility of the Owner
Payment is the responsibility of the registered owner, as listed on the title deed. Buyers of a resale home should confirm there are no outstanding dues before transfer, as part of standard legal due diligence.
How Is Rental Income Taxed in Cyprus?
Rental income in Cyprus is taxed as personal income, at progressive rates set by the Cyprus Tax Department, after a standard 20% deduction that applies regardless of actual expenses. From 1 January 2026, the Special Defence Contribution (SDC) that used to add roughly 2.25% on top of this has been abolished for rental income, leaving income tax and a smaller healthcare contribution as the only two layers.
Personal Income Tax Rates
Rental income is added to other personal income and taxed at Cyprus’s standard progressive rates:
| Annual income | Rate |
|---|---|
| Up to €22,000 | 0% |
| €22,001 – €32,000 | 20% |
| €32,001 – €42,000 | 25% |
| €42,001 – €72,000 | 30% |
| Above €72,000 | 35% |
The tax-free threshold rose from €19,500 to €22,000 as part of the same 2026 reform.
What Landlords Can Deduct
Before applying these rates, landlords can deduct:
- A flat 20% of gross rent for wear and tear, regardless of actual repair costs
- Mortgage interest on the property, if financed
- Building depreciation at 3% per year
- Documented major repair costs, on top of the 20% allowance
Only the remaining income after these deductions is taxable.
GeSY and Non-Dom Status
A 2.65% GeSY (national healthcare) contribution still applies to gross rental income for Cyprus tax residents. For those with Non-Dom status, the now-abolished SDC would have been the main saving; GeSY remains payable either way.
Non-residents pay the same progressive income tax rates on Cyprus rental income, typically with a 25% withholding tax that can often be reduced under Cyprus’s double tax treaties.
Short-term lets (Airbnb and similar) follow the same tax treatment, but also require a tourism licence from the Deputy Ministry of Tourism, and operating without one carries separate fines.
Capital Gains Tax When Selling Property in Cyprus
Selling a property in Cyprus triggers Capital Gains Tax (CGT) at a flat 20% on the profit, but a set of lifetime exemptions, nearly doubled under the 2026 reform, mean many sellers owe far less than that headline rate suggests, or nothing at all.
Who Pays Capital Gains Tax?
The seller is liable for CGT if a property is sold at a profit. The tax applies to the net gain (the difference between the adjusted purchase price and the selling price), not the full sale price. CGT applies only to property situated in Cyprus: gains on property held abroad are entirely exempt from Cyprus CGT for Cyprus tax residents, regardless of size.
CGT Rate
The rate remains a flat 20% on the taxable gain, unchanged by the 2026 reform.
What Deductions Are Allowed?
To reduce the taxable gain, sellers can deduct:
- The original purchase price, including transfer fees and stamp duty paid at the time (where applicable)
- An inflation adjustment on the purchase price, based on indexation factors published annually by the Cyprus Tax Department
- Documented improvement costs (renovations, structural changes)
- Professional fees paid on the sale (legal, licensed estate agent)
Lifetime Exemptions
The 2026 reform significantly increased Cyprus’s lifetime CGT exemptions:
| Exemption | Amount (2026) | Previously |
|---|---|---|
| General (any property) | €30,000 | €17,086 |
| Primary residence (5+ years) | €150,000 | €85,430 |
| Agricultural land | €50,000 | €25,629 |
Only one exemption applies per transaction, and each is a lifetime allowance: once used, it doesn’t reset, though any unused portion can be carried forward to a future sale.
Worked Example
Someone selling a primary residence bought for €250,000 and now worth €400,000 has a gross gain of €150,000 before any adjustments. Inflation indexation on the purchase price typically reduces this further. Even without factoring that in, the €150,000 primary residence exemption is large enough to cover the entire gain, meaning CGT owed comes to €0 in this scenario. Companies selling property don’t have access to this or any other personal lifetime exemption, and pay CGT on the full taxable gain.
0.4% Property Sale Levy
Separately from CGT, a 0.4% levy applies to the gross sale price of all property disposals in Cyprus, regardless of whether the sale produces a profit. Introduced in 2021, this levy also applies to share sales in companies that hold Cyprus property, where the property-rich threshold was tightened from 50% to 20% in 2026, capturing more corporate share transfers than before.
When and How to Pay
CGT is declared and paid at the Tax Department upon submission of the sale documents. It’s the seller’s responsibility to ensure accurate reporting and payment.
Other Taxes and Fees to Be Aware Of
Beyond VAT, transfer fees and CGT, a handful of smaller costs also affect the total budget for buying or selling in Cyprus.
Power of Attorney (PoA): No Stamp Duty From 2026
If you’re unable to be in Cyprus to sign documents in person, you can grant Power of Attorney to your lawyer or agent. Stamp duty on PoA documents was abolished from 1 January 2026 along with stamp duty on purchase contracts: documents signed from that date carry no stamp duty at all, only a small certification fee. PoA documents signed on or before 31 December 2025 still carry the old stamp duty: €6 for a general PoA, €2 for a specific (limited) one.
Title Deed and Registration Fees
Separate from transfer fees, the Land Registry charges smaller amounts for lodging contracts or deeds, issuing certified copies, and updating property records, typically €5 to €50 per item, but worth budgeting for, especially on resale purchases.
Legal and Professional Fees
Lawyers typically charge a flat fee or around 1% of the transaction value. Real estate agents can charge up to 5% plus VAT of the sale price, usually paid by the seller. Getting these fees confirmed in writing before the transaction starts avoids surprises at closing.
Other Costs to Budget For
- Property survey or valuation: €300–€1,000
- Utility connection and setup: €200–€650
- Document translation, if needed: €50–€500
- If financing: lender valuation fee €200–€500, plus a bank processing fee around 1% of the loan amount
Property Insurance Costs
Insurance isn’t a tax, but lenders often require it, and it’s worth having regardless, particularly in apartment complexes. Costs of €150 to €500 a year are typical, depending on property size, age, and the type of coverage (fire, flood, theft).
Communal Charges and Service Fees
Properties in a shared complex or gated community usually carry ongoing communal fees for pool and garden maintenance, security, management, and repairs to shared areas. These are set out in the sales contract and worth confirming with the developer or seller before completion.
What’s No Longer Taxed: Inheritance and Immovable Property Tax
Two taxes that once applied to Cyprus property owners and heirs no longer exist: the annual Immovable Property Tax, abolished in 2017, and Inheritance Tax, abolished in 2000. Together with the removal of stamp duty in 2026, this is a strong incentive for long-term property investment on the island.
Immovable Property Tax (IPT) – Abolished Since 2017
Before 2017, owners paid an annual Immovable Property Tax based on the 1980 government-assessed value of their holdings, with larger or higher-value portfolios paying progressively more. Since 1 January 2017, IPT no longer applies to individual or corporate property holders: no declarations, no payments, and no annual reporting.
Inheritance Tax – Abolished Since 2000
Cyprus eliminated Inheritance Tax even earlier, from 1 January 2000. Heirs pay no tax on property or estate transfers, whether resident or not, though the property still needs to be formally registered in the heir’s name at the Land Registry, which carries standard administrative fees.
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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 the national Immovable Property Tax in 2017, so there’s no recurring annual state-level property tax. Local municipal charges (waste collection, sewerage) still apply, but these are modest and billed annually by the municipality.
Is VAT always charged when buying a property in Cyprus?
No. VAT applies only to new properties bought from a developer. Resale properties are VAT-free, but carry transfer fees instead, payable at the Land Registry.
Can I reduce the VAT rate from 19% to 5%?
Yes. If you’re purchasing a new property to use as your primary residence, you may qualify for a reduced 5% VAT rate. Under the current rules, this applies to the first 130 m² of the property (up to a total covered area of 190 m² and a property value of €350,000), subject to eligibility and formal approval from the Cyprus Tax Department. Properties with older planning permits (application filed before 31 October 2023) may still qualify for the previous 200 m² rule: the filing deadline is 15 June 2026 if the building permit was issued by 31 December 2024, or 31 December 2026 if it was issued later or is still pending.
How much are transfer fees and when are they paid?
Transfer fees are paid by the buyer at the Land Registry when the title deed is transferred. Standard rates run 3% to 8% depending on the property’s value, with a 50% reduction applied in most cases. No transfer fees are due at all if VAT was already paid on the purchase.
What taxes apply when I sell my property?
When selling property in Cyprus, you’re subject to Capital Gains Tax (CGT) at a flat rate of 20% on the net profit, plus a separate 0.4% levy on the gross sale price. The taxable CGT gain is calculated after deducting eligible expenses: the original purchase price, transfer fees and stamp duty paid at purchase, and documented improvement costs. Lifetime exemptions can reduce this further, including up to €150,000 if the property was your primary residence for at least 5 years.
Are there any taxes for inheriting property in Cyprus?
No. Inheritance Tax was abolished in 2000, so there is no inheritance tax payable on property in Cyprus. However, the heir must formally transfer and register the property with the Land Registry, which involves standard administrative fees.
Is stamp duty still charged when buying property in Cyprus in 2026?
No. Stamp duty on property purchase contracts was abolished from 1 January 2026, under Law 239(I)/2025. Contracts signed on or before 31 December 2025 still follow the old rules (0.15% on the first €170,000 and 0.20% above that, capped at €20,000), but any contract signed from 2026 onward carries no stamp duty at all.
What is the 0.4% property tax in Cyprus?
It’s a separate levy (not part of Capital Gains Tax) charged at 0.4% of the gross sale price on all property disposals in Cyprus, in place since 2021. It also applies to sales of shares in companies that hold Cyprus property, where the qualifying threshold was tightened from 50% to 20% in 2026.
This article is for general informational purposes and reflects Cyprus tax rules as of 2026. Rates, thresholds and exemptions can change, so always confirm current figures with a Cyprus tax advisor or lawyer before making a decision.
