Cyprus Property Tax 2026: No Annual Tax, Low Transfer Fees, and 0% CGT on Foreign Assets

One of the most common questions from people considering a move to Cyprus is what they will pay to own property there. The answer tends to surprise them. Cyprus abolished its annual Immovable Property Tax (IPT) in 2017, leaving property owners with only modest municipal levies and a straightforward set of transaction costs. For investors comparing European real estate markets, this picture looks considerably cleaner than France, Spain, or Germany.

No Annual Property Tax Since 2017

The IPT, which applied progressive rates to properties valued at their 1980 market prices, was eliminated on 1 January 2017. Since then, the only recurring cost for owning immovable property in Cyprus is a municipal levy charged by local councils. Depending on the municipality, this ranges from 0.1% to 0.35% of the property's assessed value, translating in practice to between EUR 50 and EUR 300 per year for most residential properties. There is no mansion tax, no wealth tax, and no annual property wealth levy.

This makes Cyprus unusual even among low-tax European jurisdictions. Spain charges IBI annually on cadastral value. France levies taxe fonciere plus taxe d'habitation for second homes. In Germany, Grundsteuer applies regardless of residency status. Cyprus does none of this at the national level.

Transfer Fees When Buying

When purchasing property in Cyprus, transfer fees apply on the declared purchase price. The rates are progressive:

• 3% on value up to EUR 85,430
• 5% on value between EUR 85,431 and EUR 170,860
• 8% on value above EUR 170,860

If VAT was charged on the transaction (applicable to new-build properties), transfer fees are halved. On a EUR 200,000 property without VAT, the calculation works out to roughly EUR 7,800 in transfer fees. Stamp duty on property purchase contracts was abolished in 2026, removing another cost that previously added 0.15-0.2% to the purchase price.

VAT on New Builds

New residential properties from developers attract 19% VAT at the standard rate. First-time buyers purchasing a primary residence qualify for a reduced rate of 5% on the first 200 square metres, provided they occupy the property as their main home. Secondary residences and investment properties bought from developers pay the full 19%.

Capital Gains Tax on Property Sales

When a Cyprus-based property is sold at a profit, Capital Gains Tax (CGT) applies at a flat rate of 20% on the net gain after indexation adjustments and allowable deductions. Several lifetime exemptions reduce the effective burden:

• EUR 17,086 general lifetime exemption for any property disposal
• EUR 25,629 additional exemption for agricultural land sold by farmers
• EUR 85,430 lifetime exemption for a primary residence

A property owner selling their primary residence for a gain of EUR 90,000 after costs would therefore pay CGT only on EUR 4,570 after applying the full primary residence exemption. The effective rate in this scenario is under 1% of the sale price. For detailed figures on how CGT interacts with other investment gains, the Cyprus capital gains tax guide covers shares, business assets, and the full exemption schedule.

Zero CGT on Foreign Property

A feature that matters to internationally mobile owners: gains from the disposal of property located outside Cyprus are not subject to Cyprus CGT at all. A tax resident of Cyprus who sells a flat in Barcelona or a rental property in Berlin pays 0% CGT in Cyprus on that gain, regardless of the amount. This applies even if the individual is domiciled in Cyprus. Combined with the benefits available under Cyprus Non-Dom status, where dividend income and investment income face only a 2.65% GHS contribution rather than income tax, this creates a highly efficient environment for investors holding mixed asset portfolios across multiple countries.

Rental Income

Rental income from Cyprus property is taxed as ordinary personal income under the progressive income tax bands (0% up to EUR 22,000, then 20%-35% on higher amounts). Landlords may deduct 20% of gross rental income as a standard expense allowance before applying the tax rate. GHS contributions of 2.65% apply on the net rental income. Since 2026, Special Defence Contribution (SDC) no longer applies to rental income for Non-Dom residents.

For anyone considering Cyprus property investment alongside a relocation, the first practical step is establishing tax residency. Under the 60-day tax residency rule, it is possible to become a Cyprus tax resident by spending as few as 60 days in the country per year, provided several conditions are met. This path is considerably more accessible than the 183-day rule used by most European countries.

Registration Requirements for EU Residents

EU citizens purchasing property in Cyprus are free to do so without restrictions. To formalise residency and access the full tax framework, the standard route involves obtaining a registration certificate (MEU1/Yellow Slip) from the Civil Registry. This document is also required when opening business bank accounts, registering a company, or enrolling in the national health system. The Yellow Slip guide covers the documents required, typical processing times at each district office, and what to do while the certificate is pending.

Summary: What Property Owners Actually Pay in 2026

• Annual property tax: 0% (IPT abolished 2017)
• Municipal levy: EUR 50-300 per year depending on property and municipality
• Transfer fees on purchase: 3-8% (halved if VAT was charged)
• Stamp duty: 0% (abolished 2026)
• CGT on Cyprus property sale: 20% net gain after exemptions
• CGT on foreign property sale: 0%
• VAT on new builds: 19% (5% for primary residence first 200sqm, first-time buyers)
• Rental income: progressive income tax + 2.65% GHS after 20% deduction

For most buyers and long-term holders, the absence of an annual property tax and the zero CGT on foreign assets make Cyprus one of the more straightforward places in Europe to own real estate.