Understanding Cyprus Property Tax Reforms in 2026: Essential Insights for Buyers and Sellers

Starting from January 1, 2026, Cyprus will implement a significant overhaul in its property tax regulations, impacting how both buyers and sellers approach real estate transactions. These reforms go beyond mere technical adjustments—they reshape the financial dynamics, timing, and administrative procedures involved in property sales and acquisitions.

Key Highlights of the 2026 Property Tax Changes

For those interested in Cyprus property markets, it’s crucial to grasp the main modifications:

• Stamp Duty Elimination: Stamp duty on sale contracts will no longer apply for agreements signed after January 1, 2026.
• Capital Gains Tax (CGT) Updates: Enhanced CGT exemptions and expanded scope for taxing indirect real estate disposals through shares.

Why These Reforms Were Introduced

The Cypriot government aims to:

• Modernize the tax framework to better reflect today’s market realities.
• Increase transparency and improve tax compliance.
• Close loopholes in property transactions and streamline administrative processes.

The End of Stamp Duty on Property Sales

Previously, stamp duty was a mandatory fee calculated as a percentage of the property’s purchase price and applied to contracts presented at the Inland Revenue.

Now, starting with new contracts signed after December 31, 2025, stamp duty is abolished—meaning:

• Buyers will save money upfront.
• The contract signing process becomes simpler with no stamping requirements.
• Buyers and sellers face no risk of penalties related to late stamping.

What This Means for Buyers and Sellers

The removal of stamp duty reduces transaction costs and streamlines the purchase process, encouraging more fluid movement in the Cyprus apartments market and beyond.

Capital Gains Tax Revisions: Increased Exemption Thresholds

Capital Gains Tax applies to the profit made when selling property in Cyprus. The taxable gain is calculated by subtracting acquisition costs and allowable expenses from the sale price.

The 2026 reforms raise the lifetime personal exemption limits significantly:

• General exemption raised from €17,086 to €30,000.
• Agricultural land exemption increased from €25,629 to €50,000.
• Main residence exemption now at €150,000, up from €85,430, subject to conditions.

These changes will benefit individuals selling property post-2025, meaning many will pay less CGT, improving the attractiveness of selling homes or land.

Broadened CGT Scope on Company Share Disposals

Previously, Capital Gains Tax applied to share sales in companies only if over 50% of the company’s value derived from Cyprus real estate.

The threshold is now lowered to 20%, expanding the tax’s reach to more transactions involving property-holding companies.

This especially affects property investors and developers holding real estate through corporate structures, emphasizing the need for thorough due diligence during share acquisitions.

Strengthened Tax Compliance Measures

The reforms also reinforce the Tax Commissioner’s authority to withhold property transfers if tax liabilities or returns remain unsettled, making compliance a higher priority in property deals.

Enhanced Relief for Property Swap Deals

Property swap transactions—common in development projects where land is exchanged for completed units—now enjoy broader CGT relief.

Under the new framework, non-cash or consideration-in-kind property transfers can be exempted from immediate CGT, reflecting modern business practices and reducing upfront tax burdens for developers.

What Buyers and Sellers Should Do

These tax law changes bring both opportunities and obligations. Early legal consultation is recommended to navigate the new landscape effectively, ensuring maximum benefit from exemptions while staying compliant.

For those exploring property options, including cheap houses and villas for sale in Cyprus, staying informed about tax obligations is crucial to planning a profitable transaction.

Summary

The 2026 Cyprus property tax reforms bring important shifts: the removal of stamp duty simplifies buying costs, enhanced CGT exemptions lessen tax burdens on sellers, expanded CGT coverage of share disposals tightens tax oversight on complex property holdings, and extended relief for property exchanges supports innovative deal structures.

Understanding these reforms will empower buyers, sellers, and investors to make confident, well-informed decisions in the evolving Cyprus real estate market.

Maria Kokoridi
Senior Associate at Philippou Law Firm philippoulaw.com