Capital gains tax on Cyprus property: the rules from 2026

The tax falls on the gain from disposing of immovable property in Cyprus, whoever the seller is and wherever they live. It also reaches shares in a company that owns Cyprus property, shares in companies holding such a company where at least 20% of the shares' value comes from Cyprus property, and the assignment of a contract to buy Cyprus property. A gain taxed as business income, such as a developer's trading profit, falls under income tax instead.

The rate is 20% of the gain. It is charged on the gain rather than the price, so the questions for a seller are what the gain is and which exemption is still unused.

A disposal is wider than a sale. The law also counts a sale by public auction, an exchange, a registered lease, a gift, the grant of an option to buy, and passing on the rights under a contract to buy a property before its transfer, which is how an off-plan purchase is usually sold on.

The gain is the sale price less what the property cost, and that cost is first increased for inflation up to the sale, using the retail price index CYSTAT publishes. Any other money spent wholly and exclusively to earn the gain, and not already deducted for income tax, is deducted too, adjusted for inflation from when it was spent.

The adjustment matters most on a property held for many years: the longer the holding, the more of an apparent gain it removes. It is also why two sellers with the same sale price and the same purchase price can owe different amounts, when they bought in different years.

Keep the purchase contract, the transfer documents and the invoices for any work on the property. They are what proves the cost, and a cost that cannot be shown is a weak basis for a declaration.

Over a lifetime, an individual may take €30,000 of gain free of tax on any disposal, or €50,000 on farmland sold by someone whose main occupation is farming.

The sale of a main home is exempt up to €150,000 of gain when the owner lived in it, using it only as their own home, for at least 5 years in all, and the land with it is no more than 1.5 decares, which is 1,500 square metres. Gain above the limit is taxed, and so is the share of the gain that comes from any extra land. On a second or later such sale the owner must have lived there for 10 years, and the exemption is lost if the home is sold 1 year or more after the owner moved out.

The exemptions are lifetime totals, not yearly allowances, and they apply to individuals, not companies. A seller cannot combine the main-residence exemption with the general one: only one of the two applies, whichever is larger.

The 2026 tax reform, Law 242(I)/2025, raised all three lifetime exemptions from 1 January 2026. Pages that still quote about EUR 17,086, EUR 25,629 or EUR 85,430 are quoting the old limits, which the law set in Cyprus pounds.

Some transfers are not treated as disposals at all: inheritance, a gift from parent to child, between spouses or between relatives up to the third degree, a gift to a family company whose shareholders stay family members for five years, a gift to the state or an approved charity, and a transfer between former spouses under a divorce court order. The person receiving a gift takes over the giver's original cost for a later sale.

So a gift to a child carries no tax on the day, but the child's own sale later is measured from the parent's original cost. The gain on that later sale, and the tax on it, can therefore be larger than it would be for someone who had bought at market price.

The seller must declare each disposal to the Tax Department within one month of it, and in any case before the property is transferred at the Land Registry, and pay the tax calculated.

A buyer should expect their adviser to ask how the seller will clear what they owe on the property before the transfer appointment, because the transfer depends on it. On a sale paid in stages, agree in the contract when that will happen.

This guide covers an individual selling a property they own. A trader in property, a company, a sale of shares, a sale within a divorce settlement or a sale by an heir each has rules of its own, and needs advice on the facts.