This guide explains the principal purchase and disposal taxes and their eligibility conditions.
Official sources:
- Tax Department — Cyprus Tax Department
- Department of Lands and Surveys — Cadastre (transfer fees)
- Transfer Fee Calculator — DLS
- VAT 5% Calculator — Reduced VAT calculator
How does VAT apply to property purchases?
Standard Rate — 19%
Applies to taxable delivery of a new building before first occupation. VAT can also apply to taxable supplies of building land and to construction services.
An ordinary resale of an already occupied home is generally outside VAT. Taxable building-land transactions require a separate assessment.
Reduced Rate — 5%
Since June 2023, a new scheme applies (Law 42(I)/2023). The following are the ordinary eligibility conditions; statutory exceptions follow:
| Condition | Requirement |
|---|---|
| Buyer | Individual (not a company), 18 years or older |
| Purpose | Primary and permanent residence |
| Residence period | Minimum 10 years |
| Property type | Delivery or construction of a qualifying new dwelling before first occupation |
| Area at 5% rate | First 130 m² |
| Maximum area | 190 m² (area 131–190 m² taxed at 19%) |
| Maximum value at 5% | €350,000 |
| Maximum total value | €475,000 |
| Limit | No other dwelling acquired at reduced VAT; a replacement can qualify after complying with repayment rules |
For persons with disabilities: the reduced rate applies to the first 190 m², regardless of total dwelling area; the statutory monetary limits still apply.
For large families (4+ children): +15 m² for each child beyond the third.
Transitional 5% VAT Scheme (2026 Deadlines)
Where planning permission was obtained or the planning application was submitted by 31 October 2023, the transitional old rules may apply:
- 5% on the first 200 m² with no area or value caps
- The 15 June 2026 filing deadline applies where the building permit was issued by 31 December 2024
- Under section 63, the Commissioner may examine qualifying declarations until 31 December 2026 where planning-authority delays prevented timely completion. Confirm that your project qualifies for this extension with the Tax Department.
What Happens If You Buy at 5% and Start Renting?
If use as a primary and permanent residence ceases before ten years, notify the Tax Department and pay the VAT difference attributable to the unused part of the ten-year period within 30 days. Exceptions apply on death of the beneficiary or transfer to an adult child who is eligible at the transfer date. The calculation uses the VAT actually saved, not necessarily 14% of the entire property price.
Example: Assuming the full price originally qualified for 5% VAT. You bought at 5% and decide to rent out after 6 years. You repay: 14% x (4/10) = 5.6% of the property value.
Individual or Company?
| Aspect | Individual | Company |
|---|---|---|
| VAT on a taxable new-dwelling supply | 5% (if eligible) or 19% | 19%; no natural-person primary-residence reduction |
| CGT exemptions | Yes (€30,000 – €150,000) | None |
| Number of properties | Non-EU acquisition permission normally covers up to two units | Foreign/foreign-controlled companies are also subject to this permission policy |
| Advice | Check personal eligibility | Obtain legal and tax advice on the proposed structure |
The permitted combinations are two dwellings, or one dwelling plus a shop up to 100 m², or one dwelling plus an office up to 250 m². Permission is obtained from the District Administration; company ownership does not automatically remove this restriction.
Compare individual and company ownership with an adviser before choosing a structure; assess your intended use and the applicable exemptions.
How does capital gains tax work?
Paid when selling property in Cyprus. Rate — 20% on the profit.
How Profit Is Calculated
Profit = Sale Price
− Purchase Price (adjusted for inflation)
− Improvement Costs (adjusted for inflation)
− Allowable Expenses
− Lifetime ExemptionFor property acquired before 1980, the statutory 1 January 1980 value baseline may apply instead of the original purchase price. The formula is a summary; statutory valuation and exemption conditions apply.
Allowable Deductions
Section 6 allows qualifying acquisition and improvement costs and expenses incurred wholly and exclusively to produce the gain, subject to its statutory conditions and inflation adjustment. Expenses already deductible for income tax cannot also be deducted here. Have the Tax Department or your adviser confirm each proposed expense; the name of a fee alone does not establish eligibility.
Lifetime Exemptions (from 1 January 2026)
| Category | Exemption Amount |
|---|---|
| Any sale | €30,000 |
| Primary residence (5+ years of occupancy) | €150,000 |
| Agricultural land (seller whose main occupation is farming) | €50,000 |
Important: These are lifetime limits — across all sales in your lifetime, not per transaction.
The €150,000 primary-residence exemption covers land up to 1,500 m²: gains attributable to excess land are taxable. Own occupation must total at least five years (ten for subsequent residence disposals); sale at least one year after own occupation ends does not qualify. Only the larger exemption is available; exemptions cannot be added together.
When CGT Does Not Apply
- Gifts between spouses
- Gifts between relatives up to the third degree
- Inheritance transfers
- Donations for charitable purposes to a Cyprus charitable institution approved by the Council of Ministers
2026 Change: “Property-Rich Company” Threshold
Shares in a company directly owning Cyprus property can be subject to CGT without a 20% threshold. For shares in a company holding such property indirectly through other companies, the threshold is 20% of the shares’ market value derived from Cyprus property (previously 50%), disregarding liabilities. Statutory exemptions, including qualifying listed shares, remain applicable.
What are the transfer fees?
Paid when transferring the title deed at the Land Registry. Progressive scale:
| Value | Rate | With 50% Discount |
|---|---|---|
| Up to €85,000 | 3% | 1.5% |
| €85,001 — €170,000 | 5% | 2.5% |
| Over €170,000 | 8% | 4% |
Which Rate Applies
- New build (VAT paid): transfer fees are not charged at all
- No VAT charged: ordinary 50% discount, except where the seller acquired the property through foreclosure procedures under Parts VI/VIA of Law 9/1965.
Example: Buying a resale property for €300,000:
- Up to €85,000: €85,000 x 1.5% = €1,275
- €85,001 — €170,000: €85,000 x 2.5% = €2,125
- Over €170,000: €130,000 x 4% = €5,200
- Total: €8,600
Joint Ownership
When buying in shares (e.g., spouses 50/50), fees are calculated on each share separately — which can lower the total under the progressive scale.
Is stamp duty abolished?
Stamp duty was repealed from 1 January 2026 (Law 239(I)/2025). Documents signed by any party before that date remain subject to the former rules.
How does municipal tax work?
Municipal property charges depend on the municipality, the assessment year and the property. For a dated example, Limassol imposed 0.24‰ on the 2021 general valuation for 2025, not on 1980 values. Refuse and sewerage charges are separate; obtain the current bills for the particular property.
Summary Table
| Tax Type | Rate | When Paid |
|---|---|---|
| VAT (new build) | 5% or 19% | At purchase |
| VAT (ordinary occupied-home resale) | Generally outside VAT | — |
| Transfer fees | 1.5–4% (discounted) | At title transfer |
| CGT | 20% on profit | At sale |
| Stamp duty | Abolished | — |
| Municipal tax | Varies by municipality | Annually |
Looking for property in Cyprus? Compare developer listings on research.cy — developer information, price history where available, and district data.
Related guides:
- Buying Property in Cyprus: Complete Guide — full purchase process
- Hidden Costs of Buying Property — what agents won’t tell you
- Title Deeds in Cyprus — ownership and pitfalls
- Mortgages for Foreigners — banks, rates, terms
Before any transaction, consult a licensed tax adviser. Questions — in our Telegram channel.
Sources
Tax Department — gov.cy
Department of Lands and Surveys — gov.cy
Transfer Fee Calculator — gov.cy
VAT 5% Calculator — gov.cy
Tax Department — transitional declarations, 4 May 2026 — official application guidance; read with VAT Act section 63.
DLS — sale/exchange fees — DLS
Permission to purchase property — Ministry of Interior
Limassol municipal property charge, 2025 — Limassol Municipality