Cyprus has one of the most straightforward property tax systems in Europe for foreign buyers. There is no extra surcharge for being a foreigner, no annual property ownership tax, and in 2026 the government abolished stamp duty entirely. That said, the total tax bill depends heavily on one key factor: whether you are buying a new-build or a resale. Here is a clear breakdown of every tax and cost you need to plan for.
Does Cyprus charge foreigners more tax when buying property?
No. There is no extra transfer tax surcharge specifically for foreigners buying property in Cyprus. The key factor determining your transfer fee is whether VAT applies to the transaction, not your nationality. EU and non-EU buyers are subject to exactly the same tax rules when purchasing.
Is there stamp duty in Cyprus in 2026?
No. All stamp duties have been abolished as of January 1, 2026. For buyers, this means a significant reduction in transaction costs and simpler document processing when concluding a purchase. Contracts signed before December 31, 2025 still follow the old rules, but any purchase signed from January 2026 onwards has no stamp duty at all.
How much VAT do you pay on a new property in Cyprus?
The standard VAT rate for new residential buildings in Cyprus is 19%, charged on purchases directly from developers or builders.
There is one major exception. Buyers acquiring a property to serve as their primary residence may be eligible for a reduced 5% VAT rate, but only on the first 130 square meters and up to a value of €350,000, subject to strict personal-use and application requirements. Properties exceeding these size or value limits are subject to the full 19% VAT on the excess amount.
The reduced 5% VAT applies to foreign buyers in 2026. Non-Cypriot nationals, including both EU and non-EU citizens, are eligible provided they meet all other criteria, such as using the property as their primary and permanent residence and not having previously benefited from the scheme for another property.
For most international buyers purchasing a second home or investment property, the full 19% rate applies.
What are the transfer fees when buying a resale property in Cyprus?
Transfer fees apply when buying a resale property where VAT was not charged on the original sale. Cyprus uses a sliding scale: 3% on the first €85,000, 5% on the portion from €85,001 to €170,000, and 8% on any amount above €170,000. A 50% reduction is commonly applied when VAT was not paid on the purchase.
So for a resale property, you effectively pay half of these rates. On a €300,000 resale property, the calculation with the 50% discount would be roughly €5,775.
No transfer fees are payable if VAT was applicable on the original purchase, meaning new-builds where you pay 19% VAT are exempt from transfer fees entirely.
Is there Capital Gains Tax when you sell a property in Cyprus?
Yes, but the exemptions are generous and were increased significantly in 2026. Cyprus applies a Capital Gains Tax rate of 20% on profits from the sale of immovable property, calculated on the gain after allowable deductions including legal fees, transfer fees, and documented improvement expenses.
The 2026 tax reform raised the lifetime exemptions substantially. The general personal exemption increased from €17,086 to €30,000, the agricultural land exemption from €25,629 to €50,000, and the main residence exemption from €85,430 to €150,000. These higher thresholds apply to any sale contract signed from January 1, 2026 onwards.
Foreigners do not pay a higher CGT rate than residents when selling property in Cyprus. The 20% rate applies based on the property being located in Cyprus, not on the seller's nationality.
Are there any ongoing annual property taxes in Cyprus?
Cyprus does not impose an annual property ownership tax, which is a major advantage compared to many other jurisdictions. There are small municipal service charges set by your local council, typically ranging from €200 to €500 per year for an apartment and €500 to €1,000 for a villa. These cover rubbish collection and street lighting rather than a wealth-based property levy.
What does the total tax bill look like on a typical Cyprus property?
The difference between a new-build and a resale is significant. On a €300,000 new-build bought as a second home or investment, you would pay 19% VAT (€57,000) with no transfer fees. On a €300,000 resale, you would pay no VAT but approximately €5,775 in transfer fees at the 50% discounted rate. In both cases, stamp duty no longer applies as of 2026. Total buyer closing costs in Cyprus typically range from about 6% to 24% of the purchase price, depending mainly on whether you buy a resale or new-build. Legal fees of around 1% to 1.5% apply in either case.
Do you need a tax number to buy property in Cyprus as a foreigner?
Yes. You will need a Cyprus Tax Identification Number (TIC) at some point during the purchase process, particularly for registration with the Land Registry and later for utilities or rental income reporting if applicable.
What taxes apply if you rent out your Cyprus property?
Non-residents pay income tax on Cyprus-source rental income at progressive rates from 0% up to 35% depending on total taxable income. The 2026 reform removed the old Special Defence Contribution on rental income, which previously added an extra layer of taxation on top of income tax. Rental income is now only subject to income tax at progressive rates. Individuals are taxed on 80% of gross rent, with an automatic 20% deduction for deemed expenses requiring no receipts.
Is Cyprus still a good place to buy property from a tax perspective?
Yes, and the 2026 reforms have made it more attractive. The abolition of stamp duty, higher CGT exemptions, and the removal of double taxation on rental income all reduce the cost of buying and owning property on the island. Combined with no annual property tax, no inheritance tax on local property, and competitive income tax bands, Cyprus remains one of the more tax-efficient property markets in Europe for international buyers.
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