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Everything you need to know before buying real estate is included in our Cyprus Property Pack
Cyprus has one of the most favorable property tax systems in Europe, with no annual national property tax since 2017.
As of September 2025, property owners in Cyprus benefit from the absence of recurring immovable property taxes, paying mainly transactional fees when buying or selling, plus modest annual municipal charges for local services. The Cyprus property market offers significant tax advantages compared to other European destinations, with various exemptions and reductions available for primary residences and first-time buyers.
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Cyprus abolished its national property tax in 2017, leaving property owners with only modest annual municipal fees and transactional costs.
The main taxes occur when buying (stamp duty, VAT, transfer fees) or selling (capital gains tax), with rental income subject to progressive income tax rates.
| Tax Type | Rate/Amount | When Applied |
|---|---|---|
| Annual Property Tax | Abolished (€0) | No longer applicable |
| Stamp Duty | 0.15%-0.20% (max €20,000) | Property purchase |
| VAT | 5%-19% | New properties |
| Transfer Fees | 3%-8% (50% discount applies) | Title deed registration |
| Municipal Taxes | 0.1%-0.2% annually | Property ownership |
| Capital Gains Tax | 20% | Property sale |
| Rental Income Tax | 20%+ plus 2.25% SDC | Rental income |
What are the main property taxes in Cyprus?
Cyprus has six main property-related taxes that property owners and investors need to understand as of September 2025.
The primary taxes include stamp duty paid on purchase contracts, Value Added Tax (VAT) for new properties, transfer fees when registering title deeds, annual municipal taxes for local services, capital gains tax on property sales, and rental income tax for property letting. Unlike many European countries, Cyprus abolished its national immovable property tax in 2017, making it one of the most tax-friendly property markets in Europe.
Most property taxation in Cyprus occurs during transactions rather than ongoing ownership. Stamp duty ranges from 0.15% to 0.20% of the purchase price, VAT applies at either 5% for qualifying primary residences or 19% for other new properties, and transfer fees range from 3% to 8% with significant discounts available. Annual municipal taxes are minimal, typically ranging from 0.1% to 0.2% of the property's market value.
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How is property tax calculated in Cyprus?
Property tax calculation in Cyprus varies depending on the specific tax type and uses different methods for each component.
| Tax Type | Calculation Method | Rate Structure |
|---|---|---|
| Stamp Duty | Based on purchase price | 0% first €5,000, 0.15% €5,001-€170,000, 0.20% above €170,000 |
| VAT | Percentage of purchase price | 5% (qualifying residence) or 19% (standard rate) |
| Transfer Fees | Tiered system on property value | 3% first €85,000, 5% €85,001-€170,000, 8% above €170,000 |
| Municipal Tax | Annual percentage of market value | 0.1% to 0.2% annually |
| Sewerage Fees | Annual percentage of market value | 0.3% to 0.35% annually |
| Capital Gains Tax | 20% of net gain after deductions | Flat 20% rate with various exemptions |
| Rental Income Tax | Progressive rates plus SDC | 20%+ income tax plus 2.25% effective SDC rate |
What is the current rate of immovable property tax in Cyprus?
The immovable property tax rate in Cyprus is currently 0% as this tax was completely abolished in 2017.
As of September 2025, Cyprus does not impose any national annual property tax on real estate ownership. This represents a significant advantage for property investors and homeowners compared to other European Union countries that typically charge annual property taxes ranging from 0.1% to 2% of property value. The abolition of this tax was part of Cyprus's strategy to attract foreign investment and make property ownership more affordable.
Property owners now only pay modest annual municipal taxes ranging from 0.1% to 0.2% of market value, plus sewerage and waste collection fees of approximately 0.3% to 0.35% annually. These local charges are significantly lower than the previous immovable property tax system and vary by municipality.
The absence of national property tax makes Cyprus particularly attractive for investors seeking rental income properties or vacation homes, as ongoing holding costs are minimal compared to other European destinations.
Are there any exemptions or reductions on property taxes in Cyprus?
Cyprus offers several significant exemptions and reductions on property taxes, particularly benefiting first-time buyers and primary residence purchases.
Stamp duty exemptions include complete elimination for gifts between first-degree relatives and inheritance transfers. The 5% reduced VAT rate applies specifically to primary residences up to 130 square meters and €350,000 in value, with additional restrictions and qualifying criteria. Transfer fees receive a standard 50% reduction for most property purchases, and no transfer fees apply when VAT has been paid on the property purchase.
Special considerations exist for disabled buyers who may qualify for additional VAT reductions beyond the standard 5% rate. EU citizens and residents often receive preferential treatment compared to non-EU buyers, though specific exemptions vary by municipality for local taxes.
Foreign investors should note that while exemptions exist, qualifying for reduced rates requires meeting specific residency and usage requirements. The Cyprus property market rewards owner-occupiers and long-term residents with the most favorable tax treatment.
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How often do I need to pay property taxes in Cyprus?
Property tax payment frequency in Cyprus varies significantly by tax type, with most taxes being one-time payments during transactions.
Stamp duty is paid once within 30 days of signing the sales agreement and never needs to be paid again for that property. VAT is a one-time payment made during the property purchase process for new properties. Transfer fees are paid once when registering the title deed at the District Land Registry office.
Municipal taxes are the only recurring annual payments, with frequency and timing determined by individual local councils. Most municipalities collect these fees annually, though some may offer quarterly payment options. Sewerage and waste collection fees typically follow the same annual schedule as municipal taxes.
Capital gains tax is paid only when selling a property, while rental income tax requires annual declaration and payment for property owners generating rental income. The low frequency of required payments makes Cyprus property ownership administratively simple compared to countries with monthly or quarterly tax obligations.
What is the deadline for paying property taxes in Cyprus?
Property tax deadlines in Cyprus are specific to each tax type and vary by the transaction or municipal schedule involved.
Stamp duty must be paid within 30 days of signing the property sales agreement, with late payment resulting in surcharges and potential legal complications. Transfer fees have no fixed deadline but must be paid when applying for title deed registration at the District Land Registry. VAT payments are typically handled during the property purchase closing process.
Municipal taxes and sewerage fees follow annual deadlines set by individual local councils, which vary across different municipalities in Cyprus. Most councils set deadlines in the first quarter of each year, though specific dates should be confirmed with the relevant municipality. Late payment of municipal taxes can result in additional charges and interest.
Rental income tax follows the standard Cyprus tax year with annual returns due by March 31st for the previous tax year. Capital gains tax must be paid within specific timeframes following property sale completion, typically handled through the conveyancing process.
Do I need to pay taxes if I sell a property in Cyprus?
Yes, selling property in Cyprus triggers capital gains tax obligations at a flat rate of 20% on the net profit from the sale.
Capital gains tax applies to all property sales in Cyprus, calculated on the difference between the sale price and the original purchase price, adjusted for allowable deductions. These deductions include improvement costs, inflation indexation adjustments, and various lifetime exemption amounts depending on the property type and owner circumstances.
Significant exemptions exist for primary residences, inherited properties, and first-time property sales, which can substantially reduce or eliminate capital gains tax liability. The Cyprus tax system allows for inflation indexation of the original purchase price, which can significantly reduce the taxable gain, especially for properties held for several years.
Non-resident sellers face the same 20% capital gains tax rate as residents, though they may have different exemption eligibility. Professional tax advice is recommended when selling Cyprus property to ensure all available deductions and exemptions are properly claimed to minimize tax liability.
What is the capital gains tax rate when selling property in Cyprus?
The capital gains tax rate for property sales in Cyprus is a flat 20% on the net taxable gain as of September 2025.
This 20% rate applies uniformly to all property types and all sellers, whether Cyprus residents or non-residents. The tax is calculated on the net gain after deducting the original purchase price (adjusted for inflation), improvement costs, and applicable exemptions. Cyprus allows inflation indexation of the original purchase price using official government indices, which can significantly reduce the taxable gain for properties held for multiple years.
Several exemptions can reduce or eliminate capital gains tax liability. These include lifetime exemptions for primary residences, exemptions for inherited properties, and special provisions for first-time property sales. The exemption amounts and qualifying criteria are subject to specific conditions and may change over time.
Compared to other European countries where capital gains tax rates can exceed 30%, Cyprus's 20% flat rate is considered competitive for property investors. The combination of inflation adjustments and available exemptions often results in lower effective tax rates for many property sales.
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How do I pay my property taxes in Cyprus?
Property tax payments in Cyprus are made through different government departments depending on the specific tax type involved.
Stamp duty payments are made directly to the Cyprus Inland Revenue Department, either at their offices or through authorized banks and online payment systems. Transfer fees are paid at the District Land Registry office when applying for title deed registration, typically handled by your lawyer during the conveyancing process. VAT payments for new properties are usually included in the purchase process and handled by the developer or seller.
Municipal taxes and sewerage fees are paid directly to the relevant local municipality, either in person at municipal offices, through bank transfers, or via online payment portals where available. Many municipalities now offer online payment options to streamline the process for property owners.
Capital gains tax payments are typically handled through the property sale conveyancing process, with lawyers ensuring compliance before title deed transfer. Rental income tax is paid through the standard Cyprus tax system, either online through the tax department's portal or at Inland Revenue offices.
It's recommended to work with a qualified Cyprus lawyer or tax advisor to ensure all payments are made correctly and on time, particularly for complex transactions involving multiple tax obligations.
What is the transfer fee when buying property in Cyprus?
Transfer fees in Cyprus follow a tiered structure with rates of 3% for the first €85,000, 5% for €85,001 to €170,000, and 8% for amounts above €170,000.
A standard 50% reduction applies to most property purchases, effectively halving these rates for buyers. This means the practical rates become 1.5% for the first €85,000, 2.5% for the middle tier, and 4% for the highest tier. No transfer fees apply when VAT has been paid on the property purchase, which is typically the case for new properties from developers.
Transfer fees are paid when registering the title deed at the District Land Registry and are separate from stamp duty and VAT. These fees are calculated based on the property's purchase price or market value, whichever is higher, and must be paid before the title deed can be transferred to the new owner.
For a property costing €200,000, the transfer fee calculation would be: €85,000 × 1.5% + €85,000 × 2.5% + €30,000 × 4% = €1,275 + €2,125 + €1,200 = €4,600 total (with the 50% discount applied).
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Are there any local taxes or municipal taxes I should be aware of when owning property in Cyprus?
Yes, Cyprus property owners must pay annual municipal taxes and local service fees that vary by municipality and property type.
- Municipal Taxes: Annual charges ranging from 0.1% to 0.2% of the property's market value, used to fund local government services and infrastructure maintenance.
- Sewerage Fees: Annual charges typically 0.3% to 0.35% of market value for properties connected to municipal sewerage systems.
- Waste Collection Fees: Annual charges for garbage collection and disposal services, usually included in municipal tax calculations.
- Street Lighting Fees: Charges for public lighting maintenance, typically integrated into municipal tax assessments.
- Water Supply Fees: Charges for municipal water supply infrastructure, separate from actual water consumption bills.
These local taxes are significantly lower than the previous national immovable property tax and vary considerably between different municipalities across Cyprus. Coastal areas and tourist zones may have slightly higher rates due to increased infrastructure demands, while rural areas typically have lower municipal tax rates.
Property owners receive annual bills from their local municipality, and payment methods vary by council. Some municipalities offer online payment systems, while others require in-person payment or bank transfers. Late payment can result in additional charges and interest.
What taxes apply if I rent out property in Cyprus?
Rental income in Cyprus is subject to progressive income tax rates starting at 20% for non-residents, plus a Special Defence Contribution (SDC) of 2.25% effective rate.
Income tax on rental income follows Cyprus's progressive tax system, with rates beginning at 20% for non-residents and potentially higher for residents depending on total income levels. The SDC applies at 3% on 75% of gross rental income, creating an effective rate of 2.25% on total rental income. Both taxes must be declared and paid annually through the Cyprus tax system.
Property owners generating rental income must register for tax purposes and may need to pay social insurance contributions if the rental activity is considered business-like rather than passive investment. Allowable deductions include property maintenance costs, management fees, insurance premiums, and depreciation on furnishings and equipment.
Non-resident property owners face additional compliance requirements and may benefit from double taxation agreements between Cyprus and their home countries. Professional tax advice is essential for rental property owners to ensure compliance with all obligations and optimize tax efficiency through available deductions and exemptions.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Cyprus offers one of Europe's most favorable property tax environments, with no annual national property tax and modest transaction costs.
The combination of abolished immovable property tax, reasonable transaction fees, and competitive capital gains rates makes Cyprus an attractive destination for both residential and investment property purchases.
Sources
- Luma Cyprus - Property Tax in Cyprus 2025
- Keynote Assets - Property Tax Cyprus 2025
- Property in Cyprus - Tax Guide
- Nevestate - Cyprus Property Taxes
- Demetriades Law - Tax Calculator
- Kyprianou - VAT on Property Cyprus
- Life Realty - Property Taxes Explained
- PwC - Cyprus Tax Summaries
- Cyprus Properties - Capital Gains Tax Calculator
- RSM Cyprus - Real Estate Tax Guide 2025