Property Taxes in Cyprus 2025

In 2025, the property taxation system in Cyprus remains one of the most favourable in the European Union. The annual state property tax (Immovable Property Tax, IPT) has been completely abolished and is not payable since 2017. However, owners are required to pay local municipal fees for rubbish collection, street lighting, water drainage and maintenance of public areas. The amount of these payments depends on the specific municipality and usually ranges from €50 to €300 per year for a standard residential property. There are several taxes and fees that apply when purchasing property in Cyprus. If a new property is purchased from a developer, value added tax at a rate of 19% applies. For properties purchased for permanent residence, a preferential VAT rate of 5% applies to the first 130 square metres of the property, provided that the buyer meets the established criteria. No VAT is charged on secondary housing. In addition, when concluding a purchase agreement, a stamp duty is charged, the amount of which depends on the cost of the property:

The maximum stamp duty cannot exceed €20,000.

After the transaction is completed, a state fee must be paid for the registration of ownership rights with the land registry. This fee applies only in cases where the property was not subject to VAT. Its amount is:

• 3% of the value up to €85,000,
• 5% of the amount between €85,001 and €170,000
• 8% on the amount exceeding €170,000.

If the property was purchased with VAT, no registration fees are charged.

Income from renting property in Cyprus is taxable for both individuals and legal entities. Resident individuals pay income tax on a progressive scale:

In addition, residents who are domiciled in Cyprus are subject to a Special Defence Contribution and a 2.65% contribution to the health system. For non-residents, only income received from sources in Cyprus is subject to taxation. If the property is rented out on a short-term basis, for example through Airbnb or Booking, and the income exceeds €15,600 per year, there may be an obligation to pay VAT.

Legal entities resident in Cyprus are subject to corporate tax on net rental income at a rate of 12.5%. Mandatory fees similar to those applicable to individuals may be added to this. When selling real estate, capital gains tax is applied at a rate of 20% of the difference between the sale price and the purchase price. The calculation may include the cost of improvements to the property and other documented expenses. Certain exemptions are provided for individuals: up to €85,430 of profit is exempt when selling the main residence, and up to €17,086 when selling other properties. These benefits are provided once in a lifetime.

Cyprus offers investors a favourable tax climate: there is no annual property tax, inheritance tax or net wealth tax. The main expenses for owners are limited to municipal fees and taxes incurred at the time of purchase, ownership and sale of the property. From a tax planning perspective, it is advisable to assess each stage of ownership — from acquisition to subsequent sale or rental — taking into account the applicable rates and possible benefits. Investors should also note that from 2026, Cyprus will introduce a requirement to notify the tax authorities when renting property to legal entities. This increases the transparency of transactions and strengthens state control. Overall, Cyprus remains one of the most advantageous jurisdictions for property ownership in Europe due to the absence of annual property tax, moderate rates on sales transactions and a transparent system of taxation of rental income.

 Taxes when buying property in Cyprus

The purchase of real estate in Cyprus in 2025 is subject to several types of taxes and fees, which depend on the type of property, the status of the buyer and the structure of the transaction. Although Cyprus remains one of the most attractive EU countries for real estate investment, potential buyers should take into account all mandatory payments associated with registering ownership and paying government fees.

The first and most significant tax when purchasing new property is value added tax (VAT). The standard rate is 19% and applies to the purchase of new housing from a developer. However, for individuals purchasing a property for their own permanent residence, there is a preferential rate of 5%, which applies to the first 130 square metres of living space. The conditions for applying the concession are Cyprus residency status, actual residence in the property and no commercial use of the property. If the buyer purchases a second-hand property, i.e. a property on which VAT has already been paid, value added tax is not levied.

The second mandatory payment is stamp duty, which is paid upon signing the purchase agreement. Its amount is calculated based on the declared value of the property and is 0% for prices up to €5,000, 0.15% for amounts from €5,001 to €170,000, and 0.20% for amounts exceeding €170,000. The maximum stamp duty is limited to €20,000. Payment of this duty is a prerequisite for the subsequent registration of the contract with the Land Registry, and the buyer is responsible for paying it.

The state fee for registering ownership rights (transfer fee) is of particular importance. This fee is paid when transferring title to the Land and Cadastre Department. It applies only in cases where the property was not subject to VAT. The state fee rate is progressive and depends on the value of the property: 3% on the first €85,000, 5% on the amount from €85,001 to €170,000, and 8% on the amount exceeding €170,000. However, if the property was purchased with VAT, no registration fees are charged at all, which significantly reduces the overall cost of the transaction.

Additional costs when buying property in Cyprus include the services of a solicitor, notary, estate agent and valuer. Legal support for the transaction usually costs 1-2% of the property value, notary services cost around €300-800, and the estate agent’s commission is 3-5%, usually divided equally between the seller and the buyer.

It is also important to take into account the annual mandatory payments that are not related to purchase taxes but become applicable after registration of ownership. These are municipal fees for rubbish collection, lighting and water disposal, which vary depending on the area and type of property.

An important advantage for foreign investors is that Cyprus does not levy property tax (Immovable Property Tax) and does not apply inheritance and wealth tax. This makes buying property on the island particularly attractive for citizens of other EU countries and third countries who want to keep their assets in a stable jurisdiction with a moderate tax burden.

Thus, when purchasing real estate in Cyprus, the key items of expenditure remain VAT (when purchasing new properties), stamp duty and registration fees, if the property is exempt from VAT. The total costs of purchase vary from 4% to 10% of the property value, depending on its category and applicable benefits. Competent structuring of the transaction and preliminary tax planning allow you to optimise your overall costs and take advantage of all the benefits available under Cypriot law.

 Cost of legal services when purchasing property in Cyprus

When purchasing property in Cyprus in 2025, the cost of legal support for the transaction depends on the complexity of the procedure, the cost of the property and the status of the buyer. On average, the cost of legal services ranges from 1% to 2% of the price of the property being purchased. In absolute terms, this is usually between €1,000 and €2,000 for a standard transaction. If the property is high-value, purchased through a legal entity or involves a foreign investor from a country outside the European Union, the cost of services may be higher than the established range. Legal support for the transaction includes a full range of actions aimed at ensuring the legality and security of the purchase. At the first stage, the lawyer checks the title to the property, making sure that there are no encumbrances, pledges, seizures or legal restrictions. Then, the construction permits and the property’s compliance with urban planning regulations are analysed. After that, the lawyer prepares or reviews the purchase agreement, participates in the negotiation of its terms between the parties, and ensures the correct execution of all clauses related to payment, transfer of ownership and registration deadlines. At the stage of concluding the transaction, the lawyer supervises the signing of the contract, calculates and pays the stamp duty, and submits documents for registration of ownership to the Department of Land and Cadastre. If necessary, he draws up a power of attorney if the buyer acts through a representative and interacts with the tax authorities to confirm the sources of funds and obtain permits for non-residents.

Lawyers pay special attention to the tax aspects of the purchase – they check whether the property is subject to VAT, whether a preferential rate of 5% can be applied, and advise the client on future capital gains tax and rental tax obligations if the property is to be let. For foreign buyers who are citizens of non-EU countries, the lawyer also submits an application to the Cyprus Ministry of the Interior for permission to purchase property. When choosing a legal advisor, it is recommended to agree on the cost of services in advance and fix it in writing in the form of a letter of engagement. This ensures transparency of calculations and excludes additional hidden costs. It is also necessary to clarify whether the cost of document translation, apostille, notarisation and transport costs are included in the service price. Thus, legal services when purchasing real estate in Cyprus are an essential element of a secure transaction and include a set of checks, preparation of documents, registration of ownership rights and advice on tax issues. Their cost depends on the type and complexity of the transaction, but on average it is about 1-2% of the price of the property being purchased.

 Cost of notary services when purchasing property in Cyprus

When buying property in Cyprus in 2025, the cost of notary services is generally very reasonable. The standard fee for notarising signatures or seals is approximately €2 per signature or seal when performed at a notary’s office. If certification is required outside the office, the rate may increase to €5, and when using the services of a “moukhtaris” – a simple authorised person – the amount may be €10-20 per document.

This means that the total notary fees represent only a small fraction of the total cost of purchasing a property and, as a rule, do not exceed a few hundred euros. The cost is not directly related to the price of the property and can be considered a fixed administrative cost in the transaction process.

 The cost of estate agent services when purchasing property in Cyprus

When purchasing property in Cyprus, people usually use the services of a real estate agency – it is important to understand how their fees are calculated and paid.

Usually, agency commissions are around 3%–5% of the sale price of the property. In some cases, the rate may be closer to the lower limit (2%–3%) or the upper limit, depending on the region, the cost of the property and the terms of the transaction.  According to common practice, it is the seller who pays for the agency’s services, unless there is a special agreement to the contrary. The buyer may request to find out in advance who exactly pays the commission and whether it is included in the price of the property.

When choosing an agency, it is recommended to:

• Obtain a written agreement clearly stating the commission, terms, obligations of the parties and deadlines.
• Ensure that the agent is licensed and registered with the relevant authorities.
• Discuss what services are included in the commission (marketing, viewings, negotiations, document verification, etc.).
• For large or non-standard properties, try to negotiate a reduction in commission or a fixed rate.

Thus, when planning to purchase real estate in Cyprus, it is necessary to add the agency’s commission, unless the seller has agreed on a different payment scheme, and take this into account in the overall cost calculation.

 Taxes on property ownership in Cyprus

In 2025, the tax burden on property ownership in Cyprus remains one of the lowest in the European Union. The main state tax on real estate, which was previously in force, has been completely abolished, and today owners only pay local municipal fees and some related payments, depending on the category of the property and its location.

Following the abolition of the Immovable Property Tax, the only mandatory payments for owners are local taxes levied by municipal or rural councils. These are used to finance public services such as rubbish collection, street lighting, road maintenance and sewerage systems. The amount of these charges is usually small, ranging from €50 to €300 per year for a standard residential property, but in large resort areas with developed infrastructure, it may be higher. The amount of the specific payment is determined by the local authorities depending on the type of property and its cadastral value.

Separately, there is a charge for water disposal and sewage treatment, which is levied by specialised councils (Sewerage Boards). It is usually calculated as a percentage of the cadastral value of the property and amounts to approximately 0.05-0.35% per annum. This fee is paid by all property owners connected to the central sewerage system and is used for the operation and development of municipal infrastructure.

For owners of flats in multi-unit residential complexes, a monthly or annual contribution for the maintenance of common areas of the building and adjacent territory (maintenance fees) is also mandatory. Its amount depends on the level of service, the availability of a swimming pool, lifts, security, landscaping and other amenities. The average cost of such services ranges from €50 to €150 per month, but in luxury complexes it can reach €300-400 per month.

Cyprus has no wealth tax, tax on ownership of second or subsequent properties, or inheritance tax. This makes Cyprus one of the most attractive jurisdictions in Europe for long-term property ownership. Owners are also exempt from mandatory annual reporting if the property is not used for commercial purposes and does not generate income.

If the property is used for profit, for example, it is rented out, the owner is required to declare the income and pay the corresponding income tax, as well as special fees. For resident individuals, progressive income tax rates and special contributions to the health and defence systems apply. For legal entities, rental income is included in the company’s total taxable base and is subject to corporate tax at a rate of 12.5%.

Thus, owning property in Cyprus does not entail significant tax liabilities. The state does not levy an annual property tax, and the main financial burden is limited to moderate municipal fees and operating charges. This makes Cyprus one of the most favourable EU countries for long-term capital storage in the form of real estate, especially in terms of tax optimisation and ease of administration.

 Taxes on short-term property rentals in Cyprus

In 2025, Cyprus maintains an attractive tax regime for owners renting out property on a short-term basis, but activity in this sector requires strict compliance with tax and administrative rules. The legislation regulates the rental of flats and houses through online platforms such as Airbnb and Booking.com and requires owners to register their properties in a special state register.

Any owner planning to rent out accommodation for less than 30 days must register with the Short-Term Rental Register, which is maintained by the Cyprus Ministry of Tourism. After registration, each property is assigned a unique number, which must be indicated in all advertisements. Without registration, short-term rental activity is considered illegal and may result in administrative liability, including fines of up to €5,000 and suspension of activity.

From a taxation perspective, income from short-term rentals is recognised as income from economic activity and is subject to taxation depending on the status of the owner – natural or legal person – as well as their tax residency. For resident individuals, a progressive income tax scale applies: 0% on income up to €19,500, 20% on income from €19,501 to €28,000, 25% on income from €28,001 to €36,000, 30% on income from €36,001 to €60,000, and 35% on income above €60,000.

In addition, a Special Defence Contribution is levied on residents who are domiciled in Ireland. All rental income, regardless of its duration, is also subject to a mandatory contribution to the General Health System (GHS) at a rate of 2.65%.

Special attention should be paid to value added tax. In cases where the total income from short-term rentals exceeds the threshold of €15,600 per year, the owner is required to register as a VAT payer and charge 9% tax on short-term accommodation services. This rule applies to landlords who provide accommodation to tourists or business travellers if the services are of a systematic nature. In this case, the owner is entitled to deduct VAT on expenses related to the maintenance and operation of the property.

Legal entities that rent out property on a short-term basis are subject to corporate tax on net profits at a rate of 12.5%. In addition, a contribution to the health care system and a levy to the defence fund may be charged on income if the company has tax resident status in Cyprus. Landlords are required to keep records of income and expenses related to rental activities and file an annual tax return. Income from short-term rentals is included in the total tax base and may be reduced by documented expenses such as repairs, cleaning, utilities, advertising and booking platform commissions.

Thus, when renting out property in Cyprus on a short-term basis, the owner must take into account three key tax aspects: income tax, special levies (SDC and GHS) and, if the established threshold is exceeded, value added tax. Despite the mandatory registration and tax reporting requirements, the overall tax burden remains moderate, and the possibility of deducting VAT on expenses makes this a profitable venture for property owners focused on the tourist market.

 Taxes on long-term property rentals in Cyprus

In 2025, taxation of income from long-term property rentals in Cyprus remains stable and favourable for owners. The country’s legislation clearly distinguishes between short-term and long-term rentals: if a property is rented for more than 30 days and is not intended for temporary tourist accommodation, such a rental is not considered a hotel activity and is not subject to VAT.

Income from long-term rentals is recognised as passive income from property and is subject to inclusion in the owner’s taxable base. For individuals who are tax residents of Cyprus, a progressive income tax scale applies:

For non-residents, only income received from sources within Cyprus is taxable. However, non-residents are not entitled to the same tax deductions and allowances available to residents.

In addition, a Special Defence Contribution (SDC) applies to resident domiciled persons. It amounts to 2.25% of the total rent. This levy is intended to finance national programmes and applies only to residents with Cypriot tax domicile. In addition to the SDC, all landlords, both individuals and legal entities, are required to pay a contribution to the General Health System (GHS). The rate is 2.65% of rental income. The contribution is withheld in addition to income tax and SDC and is payable annually when filing a tax return.

Legal entities resident in Cyprus that let property on a long-term basis are subject to corporation tax at a rate of 12.5% on net profit, i.e. after deduction of documented expenses related to the maintenance and management of the property. Corporate income may also be subject to a health insurance contribution and a defence fund levy if the company is a tax resident of the country.

Rental income can be reduced by a number of expenses directly related to the operation of the property. These include utilities, repairs and maintenance, management company fees, property insurance and depreciation. It is important that all expenses are documented and reflected in the accounting records. From a VAT perspective, long-term residential property rentals are exempt from taxation, which makes this type of rental easier to administer. However, commercial property rentals may be subject to VAT at a rate of 19% if the parties to the transaction have voluntarily agreed to include the tax and have registered the contract accordingly.

Thus, the total tax burden on income from long-term leases for individuals who are residents of Cyprus consists of income tax, defence tax and health insurance contributions. For legal entities, corporate tax applies with the possibility of deducting expenses. Cyprus maintains one of the most transparent and favourable rental income tax regimes in the European Union, while providing flexibility and minimal administrative requirements for property owners.

 Taxes on the sale of real estate by individuals in Cyprus

In 2025, the taxation of real estate sales by individuals in Cyprus is governed by the provisions of the Capital Gains Tax (CGT). This tax is levied only on the disposal of real estate located in Cyprus and applies regardless of whether the seller is a tax resident of the country or not. The tax is paid on the difference between the sale price and the purchase price of the property, adjusted for documented expenses related to its purchase, maintenance and improvement.

The basic capital gains tax rate is 20%. When calculating the taxable base, it is permitted to deduct the costs of legal services, stamp duties, registration fees, agency commissions, capital improvement expenses (repairs, reconstruction, expansion) and cost indexation in line with inflation from the amount of profit. Thus, the tax is levied not on the total sale amount, but only on the net capital gains actually received by the owner.

Certain exemptions and benefits are available to individuals, allowing them to reduce or completely eliminate their tax burden. The main exemption is granted when selling one’s primary residence. If the owner has owned the property for at least five years and has lived there permanently for at least three years, they are entitled to a CGT exemption of up to €85,430. This exemption applies once in a lifetime and does not apply to properties purchased for investment purposes.

For the sale of other properties that are not the main residence, a standard exemption of up to €17,086 applies. In addition, when selling agricultural land used by the owner for farming, an additional exemption of up to €25,629 may apply. All exemptions are personal and cannot be combined – the seller has the right to choose one exemption depending on the nature of the property. If the property was purchased before 1 January 1980, the valuation on that date is used as the base value when calculating capital gains, which significantly reduces the tax base. Also, when inheriting a property, capital gains tax is not levied at the time of transfer of ownership, but is applied when the heir subsequently sells the property.

It should be noted that capital gains tax applies only to properties located in Cyprus. If a Cyprus tax resident sells property located outside the country, such income is not subject to CGT in Cyprus. After calculating the tax, the individual is required to file a declaration of sale with the tax authorities and pay the tax within 30 days of the date of the transaction. Otherwise, penalties and interest for late payment will be charged. Apart from capital gains tax, there are no other mandatory taxes on the sale of real estate by individuals. Value added tax on sales applies only to new properties sold by developers and does not apply to private owners selling previously purchased homes. There is also no property transfer tax or government fees, except for possible notary and registration costs.

Thus, when selling real estate by an individual in Cyprus, the main tax liability is the payment of capital gains tax at a rate of 20%. The existence of a wide range of exemptions, as well as the possibility of taking into account all related expenses, make the Cypriot tax system flexible and favourable for owners. Combined with the absence of inheritance and wealth taxes, Cyprus remains one of the most attractive jurisdictions for long-term ownership and subsequent sale of real estate.

 Taxes on the sale of real estate by a company in Cyprus

In 2025, one of the most transparent and predictable tax regimes in the European Union applies to the sale of real estate by a legal entity in Cyprus. All transactions involving the sale of real estate located in the country are governed by corporate tax and capital gains tax regulations. If the property is on the balance sheet of a Cypriot company and was used for business purposes, the profit from its sale is considered commercial income. In this case, it is subject to corporate tax at a rate of 12.5%, which is one of the lowest in the EU. When calculating the tax base, the company has the right to deduct documented expenses related to the acquisition, maintenance and operation of the property, as well as depreciation allowances. This allows for a significant reduction in the tax burden.

If the property was not used in the company’s operating activities but was considered an investment asset, the profit from its sale is subject to capital gains tax (CGT) at a rate of 20%. This tax is calculated based on the difference between the sale price and the initial purchase price, taking into account all allowable expenses. At the same time, Cyprus tax legislation allows for the purchase price to be adjusted for inflation, which further reduces the amount of tax. For companies resident in Cyprus, the principle of worldwide taxation applies, i.e. corporate tax is levied on income from the sale of real estate both in Cyprus and abroad. However, capital gains tax (CGT) is levied exclusively on transactions involving properties located in Cyprus. If a Cypriot company sells real estate located outside the country, the profit from this sale is included in the total tax base and is subject only to corporate tax, without the application of CGT.

In cases where a Cypriot company owns real estate through subsidiaries or holding companies, capital gains tax rules apply to the sale of shares. If the active part of the company whose shares are being sold consists mainly of Cypriot real estate, capital gains tax is levied even if the subject of the transaction is shares rather than the property itself. This measure prevents tax avoidance through corporate structures. In addition to corporate tax or CGT, the sale of real estate by a company may give rise to value added tax (VAT) liabilities. If the property is new and is being sold by a developer, the standard VAT rate of 19% applies. The sale of secondary real estate is exempt from VAT if the tax has already been paid on its initial purchase. In this case, the company is only required to pay stamp duty and expenses related to the transfer of ownership.

After calculating tax liabilities, the profit remaining after paying tax can be distributed among shareholders in the form of dividends. When paying dividends to Cypriot resident domiciled persons, a Special Defence Contribution (SDC) is applied at a rate of 17% of the dividend amount. If dividends are paid to non-residents, no withholding tax is levied, making Cyprus one of the most advantageous jurisdictions for owning and disposing of real estate through a company. In total, the tax burden on a company selling real estate in Cyprus consists of corporate tax of 12.5% (or CGT of 20% if the property was not used for commercial purposes), possible VAT of 19% on the sale of new properties, and SDC of 17% on the distribution of profits in the form of dividends. At the same time, the company has the opportunity to optimise its tax base through expenses and depreciation, as well as avoid double taxation thanks to Cyprus’ existing network of international agreements.

Thus, when a legal entity sells real estate in Cyprus, a balanced tax regime applies, which provides the state with stable revenues and businesses with predictability and flexibility. The low corporate tax rate, the absence of withholding tax on dividends and the possibility of optimising profits make Cyprus one of the most attractive European jurisdictions for investing and managing real estate assets.