Cyprus Tax Changes 2026 — 21 Property Finder

Effective from 1 January 2026 — Cyprus introduced one of its most significant tax reforms in decades. Key measures simplify rules, raise exemptions (reflecting property price increases), abolish outdated taxes, and close loopholes — especially in property-related transactions.

Key Real Estate-Related Changes

1. Stamp Duty — Fully Abolished

Stamp duty on contracts (including property sale agreements) is completely eliminated for contracts signed on/after 1 January 2026. This removes an upfront cost and simplifies paperwork for buyers and sellers.

                    Impact: Lower transaction costs mean faster deals and increased market liquidity.
                

2. Capital Gains Tax (CGT) on Property — Lifetime Exemptions Increased

CGT rate remains 20%, but lifetime exemptions (for individuals) are significantly higher:

Type of Disposal	Old Exemption	New Exemption (2026+)
Any property (general)	€17,086	€30,000
Agricultural land (by farmer)	€25,629	€50,000
Primary / main residence	€85,430	€150,000

These are lifetime caps. Indexation (inflation adjustment) and deductible costs still apply.

3. Property-Rich Companies / Indirect Disposals

Threshold lowered from 50% → 20%: disposal of shares now triggers CGT if ≥20% of the shares' value derives from Cyprus immovable property. Fair market value rules apply to prevent undervaluation.

                    Impact: Stricter rules close loopholes in property transactions through corporate structures.
                

4. Rental Income

Special Defence Contribution (SDC) on rental income abolished → only PIT (or CIT) + GHS (2.65% on gross, capped) apply. Net yields improve for landlords.

5. Other Important Changes

New CGT relief for land-for-apartment / land-for-development swaps (with conditions).
Corporate Income Tax raised to 15% (affects developers & holding companies).
No annual Immovable Property Tax (abolished since 2017 — not reintroduced).

Overall Impact on Real Estate Sector

Buyers: Lower transaction costs (no stamp duty) → cheaper & faster deals. Estimated savings of 0.5-2% of property value.
Sellers: Much higher CGT exemptions → more net proceeds, encourages listings & mobility. Primary residence sellers save up to €13,000 in additional tax.
Landlords/Investors: No SDC on rents → better after-tax returns. Typical improvement of 2-3% on net rental yields.
Developers: Higher CIT (12.5% → 15%), but swap relief helps land assembly; stricter indirect disposal rules require more careful structuring.
Market Overall: Expected increase in transactions, liquidity, and investor interest. Cyprus remains competitive (no IPT, EU member, attractive rates).

Bottom Line: The 2026 tax reform is overwhelmingly positive for the Cyprus real estate market. Lower costs for buyers, better returns for sellers and landlords, and a more transparent system overall. The market is expected to see increased activity and foreign investment.

For personalised advice consult a Cyprus tax advisor or lawyer. Information based on laws published December 2025 — January 2026.