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.
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.
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.
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