Property-Related Taxes in Cyprus

Nonresident individuals are generally subject to Cyprus income tax only on income derived from sources in Cyprus, including rental income from immovable property situated in Cyprus. Individuals are taxed separately for income tax purposes.

Rental Income Tax

Rental income earned by a nonresident individual from property situated in Cyprus is subject to the ordinary progressive income tax rates from 0-35%. A standard deduction equal to 20% of gross rental income is generally available, meaning that income tax is ordinarily calculated on 80% of gross rental income. A General Healthcare System (GHS) contribution of 2.65% is also generally imposed on gross rental income.

Based on the 2026 income tax rates, and assuming the taxpayer has no other Cyprus-taxable income, the approximate effective tax burden (including GHS) is 2.65% on gross rental income of €1,500 per month, 15.4% at €6,000 per month, and 22.53% at €12,000 per month.

Capital Gains Tax

Capital gains arising from the disposal of real estate situated in Cyprus are generally subject to Capital Gains Tax at a flat rate of 20%, regardless of whether the individual is a Cyprus tax resident. The taxable gain is generally calculated as the disposal proceeds less the property's acquisition cost, qualifying improvement and capital expenditure, and other allowable costs. The acquisition cost and qualifying capital expenditure may generally be adjusted for inflation when calculating the taxable gain.

For property acquired before 1 January 1980, special rules apply based on the property's value as at 1 January 1980.

From 1 January 2026, individuals may generally claim a lifetime exemption of up to €30,000 against gains from the disposal of property. A higher lifetime exemption of up to €150,000 may apply to the disposal of a qualifying principal residence, subject to the applicable conditions. These lifetime exemptions are subject to an overall maximum and previous amounts claimed are taken into account.

Corporate Tax

From 1 January 2026, the standard corporate income tax rate in Cyprus is 15%. Cyprus tax-resident companies are generally subject to corporate income tax on their taxable worldwide income, while nonresident companies are generally taxed on specified Cyprus-source income and income attributable to a permanent establishment in Cyprus. Expenses incurred wholly and exclusively for the production of taxable income are generally deductible, subject to applicable limitations.

Gains realized by companies from the disposal of immovable property situated in Cyprus are generally subject to Capital Gains Tax at a rate of 20%, rather than the standard 15% corporate income tax rate. Capital Gains Tax may also apply to disposals of shares in companies that directly or indirectly hold Cyprus immovable property, subject to the applicable conditions. Qualifying corporate reorganizations may benefit from tax exemptions, provided the statutory requirements are satisfied.

Property Buying Costs and Transaction Taxes

Annual Property Tax

Cyprus does not levy a nationwide annual immovable property tax. The former Immovable Property Tax was abolished with effect from 1 January 2017.

Property owners may nevertheless be liable for local authority charges and fees, including charges relating to refuse collection, sewerage and other municipal or community services. The amount payable varies according to the location, type and characteristics of the property and the charges imposed by the relevant local authority.