What is the Capital Gains Tax rate in Cyprus?

Cyprus Capital Gains Tax (CGT) is 20% of the net gain on the disposal of immovable property under Law 52/1980. The taxable gain is the sale price minus the indexed acquisition cost, improvement costs, and allowable selling expenses.

What triggers a CGT event in Cyprus?

A CGT event is triggered by the disposal of immovable property in Cyprus — including outright sale, gift, exchange, or compulsory acquisition. Transfers upon death are generally exempt.

How does the CGT lifetime exemption work?

Every individual has a lifetime CGT exemption of €17,086. If the property is your primary residence, the exemption increases to €85,430. These are one-time deductions applied against cumulative net gains across your lifetime.

What deductions can I claim against my CGT liability?

Allowable deductions include the inflation-indexed cost of acquisition, the cost of permanent improvements made to the property, estate agent commissions, legal fees, and Land Registry levies. Regulation 6.2 allows indexation of costs to the disposal date, significantly reducing taxable gain.

Capital Gains Tax on Property in Cyprus: The 2026 Investor’s Guide

This guide provides a complete analysis of the 20% capital gains tax on property in Cyprus following the 2026 tax reforms. We detail the increased €150,000 primary residence exemption and the key deductions available under Law 188(I)/2007 to protect your investment returns.

The 2026 reforms brought significant changes to the Cyprus CGT framework — creating new planning opportunities for buyers and sellers alike. Whether you are purchasing your first Cyprus property or managing a real estate portfolio, understanding the updated rules is essential.

Key Takeaways

Capital Gains Tax in Cyprus is a flat 20% levy on net profits from the disposal of immovable property, governed by Law 188(I)/2007.
The primary residence exemption increased to €150,000 (from €85,430) effective 1 January 2026, subject to a five-year occupation requirement.
The general lifetime exemption increased from €17,086 to €30,000.
A new anti-avoidance rule lowers the share disposal threshold to 20% (from 50%) for shares in property-holding companies.
All disposals require a Tax Clearance Certificate and settlement of the 0.4% contribution levy before the Land Registry transfers title deeds.

The Framework of Capital Gains Tax (CGT) under Law 188(I)/2007

Capital Gains Tax is a 20% levy on the net profit derived from the disposal of immovable property in Cyprus. Governed by Law 188(I)/2007, this framework provides a transparent and predictable environment for property investors.

The tax applies specifically to "immovable property" situated within the Republic of Cyprus, covering both the direct transfer of land or buildings and the sale of shares in companies holding Cyprus property.

From 1 January 2026, if a company derives at least 20% of its market value from Cyprus property, share disposals trigger a CGT event. This threshold was lowered from 50% to reduce avoidance via indirect holdings.

What Triggers a CGT Event?

A "disposal" is broader than a standard sale. Law 188(I)/2007 classifies the following as taxable events: exchange of properties, long-term leasing arrangements, and gifting property to non-relatives. The Land Registry assesses market value at the time of disposal to ensure the 20% rate applies to the actual economic gain.

The 20% Rate and Net Profit Calculation

Your CGT liability starts with "Net Profit" — the difference between disposal proceeds and original acquisition cost. The Cyprus Tax Department allows the base cost to be increased using the Consumer Price Index (CPI) from purchase date to sale date, ensuring you are only taxed on real growth.

Maximising Deductions: The Impact of Regulation 6.2

Regulation 6.2 provides a framework for reducing your taxable gain through documented capital improvements and acquisition costs. You must maintain valid invoices and official receipts for all claims.

Interest on loans used to acquire the property is a significant — and often overlooked — deduction. Commissions paid to registered real estate agents are also fully deductible.

Eligible Capital Improvements

Routine maintenance (repainting, minor fixes) is non-deductible. Structural improvements that increase the property's value qualify under Regulation 6.2:

Property transfer fees paid at the time of purchase
Legal fees associated with both acquisition and disposal
Costs for architectural plans and planning permits
Advertising expenses incurred to secure a buyer
Structural extensions, swimming pools, or solar installations

Inflation Adjustments and the CPI

The original acquisition cost is adjusted using the monthly Consumer Price Index from the month of purchase to the month of sale. This protects your purchasing power from being taxed as a purely nominal gain.

Strategic Exemptions and Lifetime Allowances

The 2026 reforms introduced significant increases to lifetime exemptions. These allowances are cumulative throughout an investor's lifetime — not per-transaction limits.

Exemption Type	Pre-2026	From 1 Jan 2026
Primary residence	€85,430	€150,000
General disposal	€17,086	€30,000
Agricultural land	€25,629	€50,000

The primary residence exemption requires the property to have served as your main residence for at least five years before disposal. Transfers between relatives up to the third degree of kindred are entirely exempt from CGT.

The €30,000 General Exemption

The basic lifetime allowance increased from €17,086 to €30,000 effective 1 January 2026. This applies to your first qualifying disposal and is a permanent lifetime limit — not an annual reset.

The Disposal Roadmap: Compliance and Filing in 2026

The final stage of a Cyprus property sale involves a strict compliance sequence to secure a Tax Clearance Certificate from the Tax Department — required before the Land Registry will transfer title deeds.

The 0.4% Contribution Levy

The seller must settle the 0.4% levy payable to the Cyprus Central Agency for the Equal Distribution of Burdens, calculated on the gross sale price. This applies to all property disposals and has been in force since 22 February 2021.

Deadlines and Documentation

Submit the CGT declaration (Form T.D. 401) within one month of the disposal date. Late filing results in administrative surcharges. Maintain full documentation of acquisition costs and Regulation 6.2 deductions.

Securing Your Tax Clearance Certificate

The Tax Clearance Certificate confirms all liabilities and the 0.4% levy have been settled. The Land Registry will not transfer title deeds without it.

For guidance on the compliance process, contact our licensed property consultants.

Frequently Asked Questions

Is there Capital Gains Tax on overseas property for Cyprus residents?

No. CGT in Cyprus applies exclusively to immovable property situated within the Republic. Gains from real estate located abroad are generally outside the scope of Law 188(I)/2007.

What is the CGT rate for companies in Cyprus?

A flat 20% on net profit from the disposal of Cyprus property or shares in property-holding companies. While corporate income is typically taxed at 15% (raised from 12.5% in 2024), property gains are specifically carved out under the CGT framework.

How does the 0.4% levy affect net proceeds?

The 0.4% levy is calculated on the gross sale price and reduces your net proceeds regardless of profit margins. It must be settled before the Land Registry issues a Tax Clearance Certificate.

Can I avoid CGT by selling shares in a property-holding company?

Not if the company derives more than 20% of its value from Cyprus property (from 1 January 2026). The threshold was lowered from 50% specifically to prevent this form of avoidance.

What happens if I sell at a loss?

Capital losses can be carried forward indefinitely to offset future taxable gains. Under Law 188(I)/2007, losses are calculated using the same inflation-adjusted criteria as gains.

NiSea Realty Ltd | Licensed Real Estate Agency | R. N. 1378 | L.N. 690/E

Written by Marios Spyrou, Sales Director — NiSea Realty | Licensed Real Estate Agent, Cyprus (Reg. 1378, Licence 690/E)

Browse Properties → Speak to Our Tax-Savvy Agent →

Related Guides

CGT is one of several transaction costs when selling. See also: Property Transfer Fees in Cyprus: Complete 2026 Guide and our walkthrough on how to sell property in Cyprus in 2026. For buyers, our complete buying guide covers all acquisition costs.