Property Taxes in Cyprus – Complete 2025 Guide for Buyers & Investors

Understand Cyprus property taxes: VAT, transfer fees, stamp duty, rental income tax, capital gains, and corporate tax. Includes worked examples for €200k, €500k, and €1M properties.

Key Takeaways

– No inheritance tax in Cyprus.
– VAT: 19% on new builds, reduced 5% for the first 200m² of a main residence.
– Transfer fees: 3–8%, waived if VAT is paid.
– Stamp duty: 0.15–0.20% of purchase price.
– Capital gains tax: 20% on profits from resale (with allowances).
– Rental income tax: 0–35% depending on income.
– Corporate tax: 12.5%, one of the lowest in the EU.
– Buyers should budget an extra 10–15% of purchase price for taxes and fees.

Introduction

Cyprus offers a favorable tax regime for property owners compared to many EU countries. Taxes are straightforward and transparent, but buyers should budget properly to avoid surprises.

Value Added Tax (VAT)

Standard VAT is 19% on new builds. Reduced VAT of 5% applies to the first 200m² of a main residence. Resale properties are exempt.

Transfer Fees

Transfer fees are 3–8% depending on price, but waived if VAT has been paid. Paid at the Land Registry when deeds are transferred.

Stamp Duty

Stamp duty is 0.15–0.20% of purchase price, capped at €20,000.

Capital Gains Tax (CGT)

20% on profits when reselling property. Allowances exist for main residence and other properties.

Rental Income Tax

Rental income is taxed as personal income (0–35%). Special Defence Contribution applies for Cyprus tax residents.

Corporate Tax

If property is held via a company, corporate tax of 12.5% applies.

Local & Municipal Taxes

Municipality fees ~€100–€300 annually. Refuse collection ~€150–€250 annually. Communal charges vary €50–€150/month.

Worked Examples: Property Taxes

Example 1: €200k resale apartment ≈ €3,340 total taxes/fees.
Example 2: €500k new build villa ≈ €29,940 total taxes/fees.
Example 3: €1M luxury villa ≈ €315,000 total taxes/fees.

Budgeting for Property Purchase

Buyers should budget 10–15% of purchase price to cover taxes and fees. VAT is largest cost for new builds; transfer fees for resales.

Conclusion

Cyprus offers one of the most favorable tax systems in Europe. By understanding VAT, transfer fees, stamp duty, and rental/capital gains taxes, buyers can plan effectively.

Frequently Asked Questions (FAQs)

Q: Do I pay VAT on resale properties?

A: No. VAT only applies to new-build properties.

Q: How much are transfer fees in Cyprus?

A: 3–8% depending on price, but waived if VAT is paid.

Q: Is there inheritance tax in Cyprus?

A: No. Inheritance tax was abolished.

Q: What tax applies if I rent out my property?

A: Rental income is taxed as personal income (0–35%) plus SDC for residents.

Q: How much should I budget for taxes overall?

A: Expect 10–15% of the property price in taxes and fees.