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Cyprus: Taxes and Costs

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Rental income tax is
low to moderate in Cyprus

Effective Tax Rate on Rental Income
Monthly Income	€1,500	€6,000	€12,000
Tax Rate	nil	6.70%	19.5%
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INDIVIDUAL TAXATION

Non-resident individuals are taxed only on income derived from Cyprus. Married couples are taxed separately.

INCOME TAX

Taxable income is generally the aggregate of all forms of income, less deductible expenses and personal deductions.

RENTAL INCOME
Income earned through renting out property is taxable at the normal income tax rates, but some specific deductions are applicable. The taxable amount for rental income is computed as rental income less a 20% exemption. The appropriate rate is then applied.

Special Contribution for Defence

The rates for this tax vary according to which type of income it is being levied on. For rental income, 25% of the gross rental income is deducted first before the 3% rate for the contribution is applied.

CAPITAL GAINS TAX

Capital gains from the sale of immovable property acquired after January 1, 1980 are subject to 20% tax. Taxable capital gain is computed as gross selling price less acquisition costs and improvement costs. However, there is a cumulative life-time exemption of CYP50,000 (€85,430) for the sale of a private residence, provided that the owner occupied it for at least 5 years.

VALUE ADDED TAX

First time buyers of properties are subject to the reduced 5% rate of value added tax. Subsequent purchases are taxed at the regular 15% rate. The tax is imposed on the gross selling price of the property.

PROPERTY TAXATION

Real Estate Tax

Real estate tax is levied on the value of properties located in Cyprus. The base of the tax is the estimated market value of the property on January 1, 1980.

CORPORATE TAXATION

INCOME TAX

Corporate income in Cyprus is taxed at 10%. Expenses incurred in the production of income are deductible from gross corporate income.

Capital Gains Tax

The capital gains of a company are subject to 20% tax. Taxable gain is computed as gross selling price less acquisition costs and improvement costs. If the capital gains resulted from the disposal of property due to reorganization, they are not taxable.

Cyprus - more data and information

• Guide to buying houses and registering property sales in Cyprus

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