Cyprus’s tax system in 2026 underwent a series of reforms aimed at simplifying transactions and supporting private buyers. The main changes involved the abolition of stamp duty and a significant increase in tax deductions.

1. Taxes when buying property

When acquiring a property, costs depend on the market type: primary (new housing) or secondary (resale).

• VAT: Applies only to new properties.

  • 19% — standard rate.

  • 5% — reduced rate for a first home (applies to the first 130 $m^2$ for properties up to €350,000, provided that the total area does not exceed 190 $m^2$ and the price is up to €475,000).

• Transfer Fees: Paid when ownership is transferred on the secondary market. In 2026, a 50% discount continues to apply if the transaction was not subject to VAT.

Important: As of January 1, 2026, stamp duty has been completely abolished for purchase agreements signed after this date.

2. Taxes on ownership

Cyprus remains one of the few EU countries where there is no annual state tax on immovable property (Immovable Property Tax was abolished back in 2017).

• Municipal fees: Range from €100 to €500 per year depending on the size of the property. They include garbage collection, lighting, and street cleaning.

• Tax on rental income: If you rent out a home, the income is taxed according to the progressive income tax scale (the first €22,000 per year is tax-free). A contribution to the healthcare system (GeSY) of 2.65% is also withheld.

3. Taxes on sale (Capital Gains Tax)

When selling property in Cyprus, capital gains tax is paid at a rate of 20%. However, in 2026 new, expanded reliefs came into force that significantly reduce the taxable base.

Lifetime tax deductions (effective from 01.01.2026):

• €30,000 — standard deduction for any individual (previously €17,086).

• €150,000 — when selling a primary residence if the owner has lived in it for at least 5 years (previously €85,430).

• €50,000 — when selling agricultural land by professional farmers.

The amount received is reduced by one of the available lifetime limits, and tax of 20% is charged only on the remainder.

Investor summary

1. Purchase: By choosing a new-build property up to €475,000 for permanent residency, you can save on VAT (5% instead of 19%) and completely avoid transfer fees.

2. Ownership: The absence of an annual tax makes owning property in Cyprus one of the cheapest in Europe.

3. Sale: The new 2026 limits allow many private owners to sell their only home with zero capital gains tax.

The main thing about property taxes in Cyprus

1. Property buyers in Cyprus pay VAT, a transfer fee, and stamp duty. When buying a residential property from €300,000, you can obtain permanent residence in Cyprus through investment.

2. Owners pay an annual contribution to the healthcare system and a defense contribution. 

3. When selling property, capital gains tax and a contribution to the Refugee Support Fund apply.

4. Income from rental property is taxed under the progressive income tax scale. In addition, a defense contribution and a healthcare system contribution are paid.

5. Foreign investors can obtain Non‑Domicile status and not pay taxes on passive income.