Selling property in Cyprus and the taxes

The buyer’s transfer fee is not the seller’s tax. On a sale of immovable property in Cyprus the seller’s principal tax is capital gains tax, charged at 20 per cent of the gain, not of the price. The Tax Department administers it whether or not the seller lives in Cyprus. A clearance from that Department is part of an ordinary transfer, because the Land Registry will not complete the registration while the tax on the disposal is open.

What is taxed

The tax is on the gain from disposing of immovable property situated in Cyprus. Disposal is wider than a cash sale. A gift can be a disposal, though the Tax Department lists gifts that are exempt when the conditions are met: between spouses, from parents to children, and to relatives within the third degree, among others. An exchange can also be relieved if the gain is rolled into the replacement property on the conditions the Department publishes. Inheritance on death is in the exempt list. A sale of shares in a company that owns Cyprus property can be taxed as well, subject to the double-tax treaty where there is one. Shares listed on a regulated market are exempt under the statute. This page is about a straightforward sale of a house, a flat or land.

The gain starts from the sale proceeds. Off that come the cost of acquisition and of capital improvements, both adjusted for inflation, and the costs of the disposal itself, which are not adjusted. The Tax Department describes the inflation adjustment as the point of the official retail-price index: the rise that is only the currency becoming weaker is not taxed. The index is a table, month by month. This site does not copy the table, because a stale month would be a wrong tax. The capital-gains calculator asks you for the ratio you read off that table.

Costs that are indexed include the purchase price, planning and professional fees that formed part of getting the property, and later capital works. Costs that come off at face value include the agent’s commission, the lawyer’s fee on the sale, and advertising. Interest on the loan used to buy the property is treated with the unindexed disposal costs in the Department’s practice notes as summarised by firms that restate the law. If you are unsure which invoice is which, do not put it in the indexed box.

The lifetime exemptions from 2026

Article 5 of the Capital Gains Tax Law, in the consolidated text on CyLaw, now states the figures that apply to an individual. No tax is payable on gains that do not exceed €30,000, taking this disposal together with the person’s other disposals over a lifetime, not over a single year. A farmer whose main occupation is agriculture has a corresponding figure of €50,000 on a disposal of agricultural land. A main residence used by the owner exclusively for at least five years, standing on land of up to one and a half decares, is exempt up to €150,000 of gain. If the gain is larger, tax is charged on the excess. If the house stands on more land than that, the gain attributed to the extra land is taxed. A second or later disposal of a main residence needs ten years of own occupation, not five. If the owner stopped living there and sells more than a year after moving out, the residence exemption is not given.

The same article says a person is not entitled to both the general exemption and the residence exemption, only to the larger one that fits. Amounts already used on an earlier disposal come off. The pre-2026 figures, €17,086, €25,629 and €85,430, are the ones many older articles still print. They are not the figures in the consolidated section as it now reads. Companies do not receive these personal exemptions.

There is a separate relief, in the same section, for some disposals of a main residence in the course of a loan restructuring, a bankruptcy composition or a forced sale, where the proceeds do not exceed €450,000, available for disposals up to 31 December 2030. The conditions are detailed and they are about distressed sales, not about an ordinary private treaty. Do not assume a normal sale under €450,000 is tax-free. It is not.

How a file is put together

The seller, usually through the lawyer, files the capital-gains return with the contract, the evidence of what was paid to acquire the property, invoices for improvements, and the disposal expenses. If the acquisition was itself a gift, the cost may be the donor’s cost, and the paperwork has to show that chain. If there is no evidence of cost, the Department will not invent a favourable one. Keep the transfer receipt from the purchase. It is often the document that fixes the starting figure.

The Department assesses the tax. It is paid before the transfer appointment, and the receipt or the clearance certificate goes to the Land Registry with the other papers. A buyer’s lawyer who is paying attention will ask for that clearance. A seller who leaves it to the week of completion often loses the appointment.

Other amounts a seller meets

The buyer, not the seller, pays the transfer fee or the VAT, unless the contract pushes that cost across. Read the contract. Some private deals make the seller bear a share. That is a price concession, not the statute.

Conveyancing practice also describes a levy, commonly put at 0.4 per cent of the sale amount, collected for the Central Agency for the Equal Distribution of Burdens. This page has not reproduced a rate table from the Agency itself. Treat 0.4 per cent as the figure used in current completion statements, and pay the amount on the Agency’s own demand rather than a rounded guess. If the demand differs, the demand wins.

If the property was your home and you are also a Cyprus tax resident, capital gains tax is still the relevant charge. It is not replaced by income tax. Rent you received before the sale is a different computation, dealt with on the rental page. A loss on one property does not automatically wipe out a gain the law says is taxable. Ask the person who files the return before you set off anything.