IMMOVABLE PROPERTY TAX – CYPRUS
Own Property in Cyprus? Stay Compliant, Stay Secure.
Full guidance on the current property tax framework — including exemptions, local property levies, and capital gains implications.
At a Glance
| Tax Type | Applicable Level | Current Status | Applies To |
|---|---|---|---|
| Immovable Property Tax (State) | National | Abolished since 1 January 2017 | — |
| Local Municipal Property Tax | Municipality / Community | Applies based on property value & use | Property Owners |
| Capital Gains Tax | National | 20% on Cyprus-situated property gains | Sellers (individuals & companies) |
| Transfer Fees | National | 50% reduction for most transactions | Buyers |
| Stamp Duty | National | 0%–0.20% of contract value (capped) | Buyers |
No annual central property tax — Cyprus remains one of the most property-friendly jurisdictions in the EU.
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Plan your ownership, rental income, or sale transactions with clarity.
1. Overview
- The Immovable Property Tax (IPT) was abolished from 1 January 2017.
- Previously, it was levied annually by the Tax Department on the total market value of all immovable property owned in Cyprus as of 1 January 1980 values.
- Following its abolition, no annual government property tax applies.
- However, municipal/local property fees and transaction-based taxes (e.g., capital gains, transfer, and stamp duty) remain in place.
2. Municipal / Local Property Taxes
Although the state IPT no longer applies, property owners must pay local property taxes imposed by municipalities or community councils.
| Description | Rate / Basis | Remarks |
|---|---|---|
| Municipality or Community Property Tax | Typically €55–€200 per annum | Based on location, size, and type of property |
| Refuse & Sewerage Fees | €85–€250 annually | Collected by local authority |
| Communal Services Charges | Variable | Covers lighting, cleaning, and maintenance in residential zones |
These local levies ensure continued maintenance and infrastructure services within municipalities.
3. Capital Gains Tax (CGT) on Property Disposal
| Transaction | Tax Rate | Basis | Key Exemptions |
|---|---|---|---|
| Sale of immovable property located in Cyprus | 20% | Gain = Sale price – Cost – Indexation | Exemptions available (see below) |
Exemptions
- Lifetime exemption of €85,430 on disposal of a main residence.
- €25,629 exemption for disposal of agricultural land by a farmer.
- €17,086 exemption for other property sales.
(The above may not be combined — the maximum per individual is €85,430.)
Deductions
Acquisition costs, legal and transfer fees, improvement expenses, and inflation indexation are deductible when computing gain.
4. Transfer Fees
Transfer fees are payable to the Department of Lands and Surveys upon property transfer.
| Property Value (€) | Rate (per band) | Notes |
|---|---|---|
| 0 – 85,000 | 3% | 50% reduction for most transactions |
| 85,001 – 170,000 | 5% | — |
| Over 170,000 | 8% | — |
- No transfer fees are payable if VAT was applied on the purchase price.
- Transfer fees are calculated on the market value assessed by the Land Registry.
- In practice, a 50% reduction remains in force under annual extensions by the Ministry of Finance.
5. Stamp Duty on Property Contracts
| Contract Value (€) | Stamp Duty Rate | Maximum Duty |
|---|---|---|
| 0 – 5,000 | 0% | — |
| 5,001 – 170,000 | 0.15% | — |
| Above 170,000 | 0.20% | Capped at €20,000 |
Stamp duty applies to property contracts executed or brought into Cyprus and must be paid within 30 days of signing.
6. VAT on Property Purchases
- Standard VAT Rate: 19% applies to new properties.
- Reduced VAT (5%) applies to first-time home buyers (on up to 130m² of primary residence).
- Resales of existing (used) properties are exempt from VAT.
7. Immovable Property Ownership by Non-Residents
Foreigners can freely acquire property in Cyprus, subject to Council of Ministers’ approval (usually granted routinely).
Non-residents are liable to:
- Capital Gains Tax on disposal of Cyprus property;
- Municipal property taxes and local charges;
- No wealth tax or inheritance tax on ownership or transfer.
8. Key Advantages of the Cyprus Property Tax Framework
- No annual state property tax (since 2017)
- Low municipal charges
- Favourable exemptions for main residences
- Reduced or zero transfer fees
- Exemption from inheritance and wealth taxes
- Low capital gains exposure (20% on Cyprus-situated gains only)
9. Why Clients Choose Our Firm
- Complete compliance for Cyprus property owners
- Transaction advisory and tax optimization for property sales
- Representation before Land Registry and Tax Department
- Non-resident investor assistance (EU and third-country nationals)
- Structuring advice for corporate and high-value property holdings
We ensure your property transactions remain tax-efficient, compliant, and fully documented under Cyprus law.