Cyprus Introduces Major Property Tax Reforms from 1 January 2026
Cyprus has implemented a comprehensive overhaul of its tax framework, with a wide-ranging package of reforms taking effect from 1 January 2026. Several of these measures directly affect property owners, investors, and buyers, significantly reshaping the country’s real estate tax environment.
Based on guidance published by leading legal and accountancy firms, the reforms focus on three core objectives: lowering transaction costs, modernising capital gains tax rules, and strengthening tax compliance and enforcement.
Key Property Tax Changes Effective from 1 January 2026
National Immovable Property Tax
The annual national Immovable Property Tax (IPT), which was calculated using outdated 1980 property values, was abolished in 2017 and will remain permanently abolished.
Property owners will, however, continue to pay local municipal charges for services such as refuse collection, sewerage, and community infrastructure. These charges typically range between €90 and €300 per year, depending on the municipality.
Separately, a proposed “Mansion Tax” on properties valued above €3 million—introduced by AKEL MP Stefanos Stefanou—has not yet been enacted. The proposal is expected to be discussed when Parliament reconvenes after the Christmas break.
Stamp Duty Abolition
From 1 January 2026, stamp duty on contracts, share transfers, and most other instruments will be fully abolished.
This removes a long-standing transaction cost and is expected to improve market liquidity and affordability, particularly for property buyers and investors.
Capital Gains Tax (CGT) Reforms
A number of significant changes to CGT will come into force:
Exemption for Property Exchanges (Antiparochi)
Property exchange arrangements (“antiparochi”), where landowners transfer land in exchange for completed units from a developer, will be fully exempt from the 20% CGT, provided construction is completed within five years.
Increased Lifetime CGT Exemptions
Lifetime CGT allowances have been substantially increased:
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Primary residence: Exemption increased to €150,000 (from €85,430), subject to a five-year occupancy requirement
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General exemption: Increased to €30,000 (from €17,086)
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Agricultural land: Increased to €50,000 (from €25,629)
Expanded Definition of Immovable Property
To address tax avoidance, the scope of CGT has been widened. Disposals of shares in companies where at least 20% of their value derives from Cyprus immovable property (previously 50%) will now fall within the CGT regime.
Strengthened Enforcement Powers
The reforms significantly enhance the authority of the Tax Commissioner, including powers to:
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Request declarations of assets and liabilities
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Override bank confidentiality during tax investigations
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Block property transfers where any party is non-compliant with tax obligations
Mandatory Traceable Rent Payments
From 1 July 2026, rental payments exceeding €500 must be made via bank transfer or other traceable electronic methods. This measure aims to improve transparency and compliance within the rental market.
Implications for the Cyprus Property Market
Overall, the reforms are designed to reduce upfront transaction costs, modernise the tax framework, and improve enforcement, while preserving Cyprus’ attractiveness as a real estate investment destination.
Buyers benefit from the abolition of stamp duty, sellers gain from higher CGT exemptions, and authorities are equipped with stronger tools to combat tax evasion—creating a more transparent and efficient property market.
Author: Property Canvas
ETEK Property Valuers, Registered and Licensed Real Estate AgencyProperty Canvas is a leading real estate agency in Cyprus, specializing in property sales, investment, and valuation. Our team comprises licensed estate agents and certified property valuers with extensive experience in the Cypriot market, providing expert guidance to buyers, sellers, and investors. Our Team has authored the “Cyprus Introduces Major Property Tax Reforms from 1 January 2026”.
