One of the biggest advantages of owning property in Cyprus: there is no annual property tax. It was abolished in 2017. But you still need to understand capital gains, rental income tax, and the non-dom regime. Here is the full picture with real numbers.
Annual Property Tax
The Immovable Property Tax (IPT) was abolished in 2017. Unlike Spain, France, or the UK, you pay nothing annually just for owning property in Cyprus. This alone makes Cyprus one of the most attractive property markets in the EU for long-term holders.
Capital Gains Tax (CGT)
When you sell property in Cyprus, you pay 20% on the profit (sale price minus purchase price, minus allowable expenses like legal fees, transfer fees, and inflation adjustments). But there are significant lifetime exemptions:
| Category | Exempt Amount |
|---|---|
| Sale of own residence | €85,430 |
| Sale of agricultural land (by a farmer) | €25,629 |
| Any other property disposal | €17,086 |
These are lifetime allowances, not per-transaction. Once used, they are gone. The odd numbers are because they were originally set in Cyprus Pounds.
Transfer Fees
| Property Value | Rate |
|---|---|
| Up to €85,000 | 3% |
| €85,001 – €170,000 | 5% |
| Above €170,000 | 8% |
Key exemption: If you already paid VAT on the property (i.e. new-build from a developer), you are exempt from transfer fees entirely. This is a major saving on new builds.
Stamp Duty
€5K – €170K
Above €170K
Maximum cap
Paid on the contract of sale within 30 days of signing. Relatively minor cost on most transactions.
Rental Income Tax
Rental income is taxed at progressive rates from 0% to 35%. The first €19,500 of total income is tax-free.
You can deduct a 20% deemed expense from rental income before calculating tax. No receipts needed for this deduction.
Rental income is subject to 12.5% corporation tax — one of the lowest rates in the EU. Many investors hold property through a Cyprus company for this reason. The same 20% deemed expense deduction applies.
Special Defence Contribution (SDC)
Tax residents of Cyprus pay an additional 3% SDC on rental income (on 75% of the gross rent). This applies to both individuals and companies that are Cyprus tax residents.
SDC also applies to dividend income (17%) and interest income (30%) for tax residents — but there is a powerful exemption below.
Municipal Taxes & Fees
Each municipality charges a small annual fee for sewerage, refuse collection, and street lighting. This is not a property tax — it is a service charge. Expect €50–200/year depending on the municipality and property size. It is a negligible cost in the overall picture.
The Non-Dom Regime
This is the headline benefit for foreign investors. If you become a Cyprus tax resident but are not domiciled in Cyprus (i.e. you were not born here and have not lived here for 17+ years), you qualify for non-domiciled status.
- 0% SDC on rental income — No 3% defence contribution.
- 0% SDC on dividends — No 17% defence contribution.
- 0% SDC on interest — No 30% defence contribution.
- 0% tax on dividends — Cyprus does not tax dividend income for individuals (only SDC, which is exempt for non-doms).
Combined with no annual property tax, this makes Cyprus one of the most tax-efficient property markets in the EU — especially for buy-to-let investors receiving rental income and dividends.
The Bottom Line
| Tax | Rate |
|---|---|
| Annual property tax | None (abolished 2017) |
| Capital gains tax | 20% on profit (with exemptions) |
| Transfer fees | 3/5/8% (exempt if VAT paid) |
| Stamp duty | 0.15–0.20% (max €20K) |
| Rental income (individual) | 0–35% progressive |
| Rental income (company) | 12.5% corporation tax |
| SDC on rent (non-dom exempt) | 3% (0% for non-doms) |
| Municipal fees | €50–200/year |
Calculate Your True Cost
Use the byprus True Cost Calculator to see all taxes and fees for any property, including rental yield projections with tax impact.
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