Cyprus has overhauled its tax system, with a broad package of tax reforms that came into effect on 1 January 2026. Several of these changes directly impact property owners, investors, and buyers, reshaping the island’s real estate tax landscape.
After reviewing updates published across accountancy and legal advisory platforms, it’s clear that the tax reforms place a strong emphasis on reducing transaction costs, modernising capital gains tax rules, and strengthening tax compliance.
Key property tax reforms from 1st January 2026
National immovable property tax
The national annual Immovable Property Tax (IPT) – calculated on outdated 1980 property values – was abolished in 2017 and will continue to remain so.
Property owners will still be responsible for local municipal charges, which typically cover refuse collection, sewerage, and community services, and generally range between €90 and €300 per year.
Separately, a proposed “Mansion Tax“ on properties valued above €3 million, introduced in a bill by AKEL MP Stefanos Stefanou, is expected to be debated when Parliament reconvenes after the Christmas break. This proposal is not yet law.
Stamp duty
Stamp duty on contracts, share transfers and most other instruments will be fully abolished from 1 January 2026.
This move removes a longstanding transactional cost and is expected to improve affordability and liquidity across the property market, particularly for buyers and investors.
Capital gains tax reforms
Several important changes to Capital Gains Tax will come into force:
Exemption for property swaps (antiparochi)
Property exchange arrangements (“antiparochi”), whereby a landowner transfers land in return for completed unit(s) from a developer, will be fully exempt from the 20% CGT, provided that construction is completed within five years.
I have seen one article advising that ‘trapped buyers‘ who cannot sell or mortgage their property due to planning infringements may take advantage of antiparochi, by exchanging the property (presumably at a much reduced value) for a completed unit. However, I have yet to confirm this is possible.
Increased lifetime CGT exemptions
Lifetime CGT allowances have been significantly enhanced:
- Primary residence: Exemption increased to €150,000 (from €85,430), subject to a five-year occupancy requirement.
- General exemption: Increased to €30,000 (from €17,086).
- Agricultural land: Increased to €50,000 (from €25,629).
Revised definition of immovable property
To combat tax avoidance, the scope of CGT has been widened. The disposal of shares in companies where 20% or more of their value derives from Cyprus immovable property (previously 50%) will now be subject to CGT.
Expanded powers for the tax commissioner
The reforms also strengthen enforcement. The Tax Commissioner will gain enhanced authority to:
- Request declarations of assets and liabilities
- Override bank confidentiality in tax investigations
- Withhold approval for property transfers if any party is non-compliant with tax obligations
Mandatory traceable rent payments
From 1 July 2026, rent payments exceeding €500 must be made via bank transfer or other traceable electronic methods, improving transparency and enforcement in the rental market.
What this means for the Cyprus property market
Taken together, these reforms aim to reduce upfront costs, modernise tax rules, and increase compliance, while maintaining Cyprus’ appeal as a property investment destination. Buyers benefit from the removal of stamp duty, owners gain from higher CGT exemptions when they sell, and authorities gain stronger tools to combat avoidance.
