Abolishing Stamp Duty in Cyprus: What It Means for Real Estate and Investors

Sometimes you look at parts of the tax system and feel like they belong to another era. Stamp duty in Cyprus is exactly that kind of relic. During the latest meeting of the Parliamentary Finance Committee, something unusual happened: business representatives, auditors, lawyers, bankers and MPs all agreed on one thing - it’s time to put an end to stamp duty altogether. And many argue that this step could noticeably improve transparency and ease of doing business, especially in Cyprus real estate and corporate services.

Experts say that abolishing the duty would simplify transactions, cut administrative costs and strengthen the investment climate in Cyprus. For buyers who want to purchase property in Cyprus, or companies signing major contracts, the change would be significant.

Where the duty remains and why this sparks debate

The government’s current reform proposal does not abolish the 1963 Stamp Duty Law. Instead, it limits its application to four categories: loan agreements, real estate transactions, lease contracts and insurance policies above €10,000. A unified 2% rate is suggested. For property sales contracts in Cyprus, stamp duty would apply only to amounts above €50,000, with the upper cap remaining €20,000.

Economists agree the proposal is a move in the right direction but still a half-measure. Stamp duty has long been considered outdated and the reform does not address the core issue - the need for complete abolition. The budget may lose around €10 million from the current €38 million, but many argue the long-term benefits outweigh this.

Political stance: a push for full abolition

DISY MP Harris Georgiades said his party would push for the full abolition of stamp duty. In his view, the tax is inefficient and creates unnecessary bureaucracy for both individuals and companies. The potential €20 million drop in annual revenue is seen as insignificant in the wider budget context.

Tax Department head Sotiris Markides also noted that the concept itself is obsolete. With digital services becoming the norm, discussing paper stamps in 2025 feels outdated. He agreed that electronic submission of documents is the future, though full abolition still requires careful assessment of how to offset revenue losses.

Social aspect: expectations vs. reality

While the stamp duty debate continues, MPs are once again raising the issue of social support. They insist the government must fulfil its promise to increase the tax-free threshold to €24,500. Representatives of DISY and AKEL stress that reform should benefit not only businesses but also families struggling with rising costs.

Critics argue that the proposed changes do not reduce inequality and may even deepen it. They believe the reform should ensure fair redistribution and focus on easing tax pressure on vulnerable groups.

What this means for the future

Given the rapid digitalization of public services, the abolition of stamp duty seems like a logical and timely step. More and more politicians and professional organisations agree that Cyprus needs a simpler, modern tax system, particularly if the country aims to strengthen its position in Limassol’s real estate market, attract investors and support business growth.

The discussion is still ongoing, but the direction is clear: Cyprus is moving toward abandoning outdated procedures and creating conditions that support real estate investment in Cyprus, speed up transactions and enhance competitiveness.