Legal & Tax Guidelines for Buying and Selling Property in Cyprus
Cyprus offers a transparent and investor‑friendly real estate system, but buyers and sellers must follow specific legal procedures and understand the tax obligations involved in each transaction.
The following guide outlines the essential steps, risks, and financial considerations.
1. Legal Guidelines for Buying Property
1.1 Engage an Independent Lawyer
Buyers should always appoint a licensed, independent lawyer to protect their interests. This ensures proper due diligence, contract review, and safe handling of deposits.
1.2 Title Deed Due Diligence
Your lawyer must verify:
- Ownership of the property
- Whether the property has separate title deeds
- Existing mortgages or encumbrances
- Planning and building permits (for new builds)
This step prevents future disputes or delays.
1.3 Contract of Sale
The Contract of Sale must be:
- Drafted or reviewed by your lawyer
- Signed by both parties
- Stamped and registered at the Land Registry within 6 months
Registration protects the buyer’s rights until the title deed is transferred.
1.4 Deposit & Escrow
Deposits should be held in a client escrow account with clear refund terms. This protects the buyer if the seller fails to meet contractual obligations.
1.5 Permission for Non‑EU Buyers
Non‑EU nationals must obtain approval from the Council of Ministers to purchase property. Approval is typically granted for one residence.
1.6 Transfer of Title Deeds
Once payment is complete, the buyer attends the Land Registry to transfer ownership and pay applicable transfer fees.
2. Legal Guidelines for Selling Property
2.1 Capital Gains Tax (CGT) Preparation
Sellers must calculate CGT based on:
- Purchase price
- Sale price
- Allowable deductions (renovations, transfer fees, commissions)
CGT is 20% on net profit.
2.2 Mortgage & Encumbrance Clearance
If the property is mortgaged, the seller must obtain a bank waiver or settle the loan before transfer.
2.3 Providing Title Deeds
Sellers must provide clear title deeds or ensure the developer issues them (for new builds). Properties without deeds may face delays or reduced buyer interest.
3. Tax Guidelines for Buying Property
3.1 VAT (Value Added Tax)
VAT applies only to new properties:
- 19% standard rate
- 5% reduced rate for primary residence (up to 130–200 m²)
- 0% for resale properties
Reduced VAT requires that the buyer is an individual using the property as their main home.
3.2 Transfer Fees
Transfer fees apply when VAT is not charged:
- Up to €85,000 → 3%
- €85,001–€170,000 → 5%
- Over €170,000 → 8%
No transfer fees apply if VAT was paid. A 50% discount applies to non‑VAT transactions.
3.3 Stamp Duty
Stamp duty is paid by the buyer within 30 days of signing the contract:
- First €5,000 → 0%
- €5,001–€170,000 → 0.15%
- Above €170,000 → 0.20%
- Maximum €20,000 per contract
4. Tax Guidelines for Selling Property
4.1 Capital Gains Tax (CGT) ** See new updated 2026 guideline below**
CGT is 20% on profit from selling Cyprus property.
Exemptions include:
- €85,430 for primary residence (owned 5+ years)
- €17,086 lifetime exemption for other properties
- Additional exemptions for agricultural land and family transfers
4.2 Allowable Deductions
Sellers may deduct:
- Renovation costs
- Transfer fees
- Stamp duty
- Agent commissions
These reduce the taxable gain.
5. Taxes on Owning Property
5.1 Rental Income Tax
If renting out the property:
- Up to €19,500 → 0%
- €19,501–€28,000 → 20%
- €28,001–€36,300 → 25%
- €36,301–€60,000 → 30%
- Above €60,000 → 35%
Allowable deductions include maintenance, management fees, mortgage interest, and insurance.
5.2 Local Municipality Taxes
Owners pay small annual fees for:
- Waste collection
- Street lighting
- Local services
These vary by municipality.
6. Abolished Taxes
Cyprus has eliminated several taxes:
- Immovable Property Tax (IPT) – abolished in 2017
- Inheritance Tax – abolished in 2000
7. Quick Comparison: New Build vs Resale vs Commercial
| Property Type | VAT | Transfer Fees | Stamp Duty | Key Notes |
|---|---|---|---|---|
| New Build | 19% or 5% | None if VAT paid | 0.15–0.20% | Check permits, snagging list, developer reputation |
| Resale | 0% | 3–8% | 0.15–0.20% | Ensure mortgage clearance and title deeds |
| Commercial | Usually 19% | Applies if no VAT | 0.15–0.20% | Check zoning and licensing requirements |
Cyprus Capital Gains Tax Allowances for 2026
The 2026 tax reform introduces higher exemptions and more favourable rules for individuals selling immovable property in Cyprus.
1. General Lifetime CGT Exemption
- Increased from €17,086 to €30,000.
This exemption applies once in a lifetime to any property disposal.
2. Primary Residence Exemption
- Increased from €85,430 to €150,000.
- Requires 5 years of occupation as the seller’s primary residence.
This is the most valuable exemption for homeowners.
3. Agricultural Land Exemption
- Increased from €25,629 to €50,000.
Applies to qualifying agricultural property disposals.
4. Full CGT Exemption for Certain Properties
The reform retains the complete CGT exemption for properties:
- Acquired between 16 July 2015 and 31 December 2016
This remains one of the strongest tax incentives ever offered in Cyprus.
5. Deductible Expenses (Unchanged but Confirmed for 2026)
You may still deduct:
- Documented improvement/renovation costs
- Transfer fees
- Stamp duty (abolished from 2026 but deductible for past transactions)
- Legal fees
- Estate agent commissions
These reduce the taxable gain significantly.
6. CGT Rate (Unchanged)
- CGT remains at 20% on net gains.
Summary Table — 2026 CGT Allowances
| Allowance Type | 2025 Amount | 2026 Amount | Notes |
|---|---|---|---|
| General Lifetime Exemption | €17,086 | €30,000 | Applies once in a lifetime |
| Primary Residence Exemption | €85,430 | €150,000 | Requires 5 years of occupation |
| Agricultural Land Exemption | €25,629 | €50,000 | Applies to qualifying land |
| Special Exemption (2015–2016 purchases) | Full exemption | Full exemption | Retained |