Major Cyprus Property Tax Reforms Effective from January 2026

Starting 1 January 2026, Cyprus introduces a significant set of tax changes impacting property owners, investors, and buyers across the island. These reforms are designed to streamline the tax system, lower transaction expenses, and enhance tax transparency — all while preserving the island’s status as an attractive real estate market.

Overview of New Property Tax Rules

Immovable Property Tax Status

The previously abolished National Immovable Property Tax, removed back in 2017, continues to be suspended. Instead, property owners should expect to pay local municipal service fees, which generally cover waste collection, sewerage, and other community amenities, and typically range between €90 and €300 annually.

Additionally, a proposed “Mansion Tax” for homes valued above €3 million is under parliamentary discussion, although it is not yet implemented.

Stamp Duty Fully Abolished

One of the most impactful reforms is the complete abolition of stamp duty on contracts, share transfers, and most legal instruments related to property transactions. This removal of a long-standing fee is expected to boost market liquidity and make buying affordable houses and villas in Cyprus more accessible to investors and homeowners alike.

Capital Gains Tax Overhaul

• Property swaps (Antiparochi) exemption: Exchanges where landowners trade land for completed units from developers will now enjoy a full exemption from the 20% Capital Gains Tax, so long as the property construction finalizes within five years.
• Expanded lifetime exemptions: The lifetime exemption on CGT for primary residences jumps from €85,430 to €150,000, provided owners live in the property for five years. Exemptions on general disposals and agricultural land have also nearly doubled.
• Broadened CGT scope: Selling shares in companies with at least 20% of their value tied to Cyprus immovable property (down from 50%) will now trigger Capital Gains Tax, targeting new avenues of tax avoidance.

Strengthened Tax Enforcement

The Tax Commissioner gains wider powers to demand asset and liability declarations, bypass bank secrecy during tax probes, and halt property transfers if parties have outstanding tax obligations.

Mandatory Traceable Rent Payments

From 1 July 2026 onwards, rent payments above €500 must be transferred through bank or electronic channels for better transparency and regulation in the rental sector.

Impact on Cyprus Real Estate Market

These tax reforms collectively reduce upfront buying costs, update outdated rules, and tighten compliance enforcement — all contributing to Cyprus’s continued appeal for property investments. Whether you’re searching for cost-effective apartments for sale in Cyprus or exploring investment opportunities, understanding these changes ensures smarter decision-making.

While the abolition of stamp duty and increased Capital Gains exemptions offer clear financial benefits, the enhanced powers granted to tax authorities underline the importance of proper tax adherence.

Keeping abreast of these developments is crucial for anyone involved in Cyprus’s dynamic property market.