Cyprus retains its status as one of Europe’s most attractive investment havens. The tax reform that came into force on January 1, 2026 significantly simplified the levy system for individuals, but introduced new rules for the corporate sector. In this article, we will examine in detail which taxes and fees are relevant for buyers and owners in the current year.

1. Taxes on purchase: what the buyer pays

Purchasing real estate in Cyprus involves costs that depend on the property’s “age” and its intended use.

VAT (Value Added Tax)

The tax is charged only when buying new properties from a developer.

• Standard rate: 19%.

• Reduced rate of 5%: Applies to the first 130 sq. m. of living area. The total area of the property must not exceed 190 sq. m., and its value must be €475,000.

• Condition: The property must be your primary residence for 10 years.

Title Transfer Fee

Charged when registering ownership of secondary-market real estate.

• Important rule: If the transaction is subject to VAT, the title transfer fee equals 0%.

• In all other cases, rates of 3%, 5%, and 8% apply (but in 2026 a 50% discount remains in effect, reducing them to 1.5% – 4%).

Abolition of Stamp Duty

Under Law No. 239(I)/2025, as of January 1, 2026, stamp duty on real estate sale and purchase agreements has been fully abolished. This spares buyers from unnecessary bureaucracy and additional expenses at the contract-signing stage.

2. Individual vs. Company: a 2026 tax comparison

Many investors wonder whether it is better to register the property in their own name or through a Cypriot company (SPV). The 2026 reform changed the balance of advantages.

3. Taxes on rental income and new payment rules

Income tax

For individuals, the first €22,000 of annual income is tax-free. This makes Cyprus an ideal place to own 1–2 apartments for rental income.

Payment transparency (Important!)

As of July 1, 2026, a requirement for rental transparency comes into force:

• All payments above €500 must be made only through a bank or electronic platforms.

• Cash payments for rent are prohibited. Failure to comply with this rule deprives the landlord of the ability to apply tax deductions, and a business tenant will not be able to include the rent as an expense.

4. Taxes on sale: calculating profit

Capital Gains Tax

The rate is 20%. However, the reform increased the “tax shields” (lifetime allowances):

• €150,000 of profit is tax-free when selling a primary residence.

• €30,000 — a general exemption when selling any other property.

Official sources for verification

To verify the information, you can refer to the official resources:

1. Tax Department of Cyprus (mof.gov.cy/tax) — reporting forms and the tax calendar.

2. Department of Lands and Surveys — calculation of assessed value for municipal taxes.

3. Official Gazette of the Republic of Cyprus — the text of Law No. 239(I)/2025 abolishing stamp duty.

Investor takeaway:

In 2026, Cyprus became cheaper to enter (abolition of Stamp Duty) and more profitable to exit (higher CGT allowances). However, tighter control over cash payments requires a more careful approach to documenting rental agreements.