Understanding taxes when owning property in Cyprus
As soon as you own a property in Cyprus, you will be liable for certain taxes. There will be further taxes when selling the property too, and if you gain an income from the property.
Here, we’ll share insight on all the taxes and fiscal considerations to be aware of when buying a property in Cyprus.
Property taxes
Just like Council Tax in the UK or the “millage rate” in the US, the local government collects tax to pay for local services. The rates depend on where you live in Cyprus, with the municipality or council setting the fees, based on the size of the property.
Local authority fees
There is an annual charge of between €85 – €500 payable, depending on the property size, that goes to the local authority for regular refuse collection, street lighting, sewerage and other community services.
Municipality tax
An annual tax between 0.1% and 0.2% (of the property value as of 1 January 2013 or the first valuation if it is a new-build home) is payable to the local municipality.
Sewerage tax
An annual tax of 0.05% and 0.3% (of the property value as of 1 January 2013 or the first valuation if it is a new-build home) is payable to the local sewerage board (where a property is connecting to mains sewerage).
Income tax in Cyprus
In Cyprus, you are considered a tax resident if any of the following apply:
- You live there for 183+ days of the year
- You’re not considered a tax resident of another country
- You have certain links to Cyprus – e.g. familial ties or business associations
If you satisfy the 60-day rule:
- You do not reside in another country for more than 183 days
- Not a tax resident in another state
- Reside in Cyprus for at least 60 days
- Have other defined Cypriot ties
Tax residency is an essential requirement of residency applications – both permanent and temporary – as of January 1st, 2023. This requires an annual income of €24,000 + 20% for a spouse and +15% for each dependent.
Foreign pension income is taxed at a flat rate of 5% on amounts exceeding €3,420. The taxpayer can, however, on an annual basis, elect to be taxed at the normal tax rates and bands set out below:
| Chargeable income for the tax year (€) | Tax rate (%) | Accumulated tax (€) |
| 0 – 19,500 | Nil | Nil |
| 19,501 – 28,000 | 20 | 1,700 |
| 28,001 – 36,300 | 25 | 3,775 |
| 36,30 – 60,000 | 30 | 10,885 |
| 60,000+ | 35 |
Tax on property profits
Tax on rental income
If you are a tax resident then rental income is essentially added on to your regular income.
Non-residents renting out their property in Cyprus will also need to pay income tax on their rental income. Tax rates range from 20% to 35%.
Capital gains tax
Capital gains tax of 20% is payable on financial gains from the sale of a Cypriot property with the first €17,000 or so being exempt for each person.
An allowance is made for Transfer Fees paid, Inflation Rate per year and the cost of any additions to the property.
Gains from the sale of a property are exempt up to €85,430 if the owner resides in it for at least five years prior to the sale.