Taxes and Costs When Buying Property in Cyprus

When buying property in Cyprus, it is important to consider not only the purchase price but also taxes, government fees, legal costs, and other expenses associated with the transaction.

The total additional cost of a property purchase depends on the type and value of the property, whether VAT applies, the buyer's status, and the structure of the individual transaction.

The following is a general overview of the principal taxes and costs that may arise when buying and owning property in Cyprus. The amounts and tax treatment applicable to an individual transaction should always be confirmed before proceeding.

VAT on Property Purchases

The standard VAT rate in Cyprus is 19%.

VAT may apply, in particular, to the acquisition of new property where the transaction falls within the applicable VAT legislation. Buyers should establish in advance whether VAT is included in the advertised purchase price or is payable in addition to it.

The VAT treatment of the individual property should be confirmed before signing the Sale Agreement and making substantial payments.

Reduced 5% VAT Rate

Under current Cyprus legislation, a reduced VAT rate of 5% may apply to the purchase or construction of a residence that will be used by the purchaser as their principal and permanent place of residence in the Republic of Cyprus, subject to the applicable statutory conditions.

The reduced rate does not apply automatically. The purchaser must satisfy the applicable criteria and follow the prescribed procedure for obtaining the relevant approval.

The portion of the property's value to which the reduced rate may apply is affected by statutory criteria including the characteristics and value of the residence. Transitional provisions may also apply to certain developments.

Eligibility should therefore be assessed in relation to the individual purchaser and the particular property.

Property Transfer Fees

Transfer Fees are government fees associated with the registration of the transfer of legal ownership through the Department of Lands and Surveys.

The basic calculation uses rates of 3% for the portion of the value up to €85,000, 5% for the portion from €85,001 to €170,000, and 8% for the portion above €170,000.

Where VAT has been charged on the acquisition of the same property, Transfer Fees are generally not payable. Where Transfer Fees are payable, current legislation provides for a 50% reduction in the calculated amount, subject to specific statutory exceptions.

The actual amount payable should be determined according to the individual transaction and the applicable Department of Lands and Surveys rules.

Stamp Duty from 1 January 2026

Cyprus Stamp Duty legislation was repealed with effect from 1 January 2026.

As a result, contracts and other documents signed on or after 1 January 2026 are no longer subject to Stamp Duty under the repealed legislation.

Documents signed by at least one party before 1 January 2026 may remain subject to the previous Stamp Duty rules.

Legal and Professional Costs

Buyers should budget for an independent lawyer who can conduct legal due diligence, review the relevant documentation and Sale Agreement, and represent the buyer's interests within the agreed scope of services.

Depending on the transaction, a tax adviser, valuer, engineer, architect, or other professional specialist may also be required.

Professional fees vary according to the adviser, property, and complexity of the transaction and should be confirmed in advance.

Costs After Buying Property

Property owners may incur ongoing expenses associated with owning and maintaining their property in Cyprus.

Depending on the property, these may include municipal and local charges, utilities, insurance, and, for properties within developments or apartment buildings, communal and maintenance charges.

Buyers should establish the current recurring costs relating to the particular property before completing the purchase.

Taxation of Rental Income

Owners receiving rental income from property in Cyprus may have tax obligations depending on their status and individual circumstances.

From the 2026 tax year, rental income is no longer subject to Special Defence Contribution (SDC). Income Tax may still apply and, for individuals in applicable circumstances, rental income may also be subject to a contribution to the General Healthcare System (GHS/GeSY).

From 1 July 2026, rent relating to immovable property in Cyprus must be paid by bank transfer, debit or credit card, or another recognised electronic payment method in accordance with the applicable requirements.

The tax treatment of rental income should be assessed according to the circumstances of the individual owner.

Capital Gains Tax When Selling Property

A future sale of property in Cyprus may give rise to Capital Gains Tax.

The general Capital Gains Tax rate is 20% and applies to taxable gains arising from the disposal of immovable property in Cyprus, taking into account the deductions, exemptions, and calculation rules provided by law.

Certain statutory exemptions were revised from 2026, so the tax consequences of a sale should be calculated according to the circumstances of the individual owner and transaction.

Tax Residency and Non-Dom Status

Purchasing property in Cyprus does not by itself determine an individual's Cyprus tax residency or domicile status.

Tax residency and domicile are determined according to separate criteria and may have a significant effect on an individual's tax position in Cyprus.

Where a property purchase forms part of a relocation, change of tax residency, or investment structure, these matters should be considered separately with a qualified tax adviser.

Calculating the Cost Before You Buy

Before making a final decision, buyers should establish the anticipated total acquisition cost of the particular property, including the purchase price, applicable VAT or Transfer Fees, legal and professional costs, and other transaction-related expenses.

Cyprus Realty Center provides information about the property and its purchase terms and coordinates communication with independent lawyers, tax advisers, and other professional specialists where their involvement is required.

The information on this page is provided for general information only and does not constitute individual legal or tax advice. Tax rules, rates, and eligibility criteria may change and should be confirmed in relation to the individual transaction.

Services that require a licensed real estate agent under the laws of the Republic of Cyprus are provided through the licensed real estate agency C.K.C.M PROPERTY ONE REAL ESTATE LTD (RN1026 | LN510/E).

If you are planning to buy property in Cyprus, contact Cyprus Realty Center. We can help you identify suitable properties and coordinate the next stages of the purchase process.