Unlike the broad regimes found elsewhere in Europe, capital gains tax in Cyprus reaches only real estate located in the Republic and shares whose value comes from that real estate, while gains on listed securities, overseas holdings and most private investments sit outside it altogether. The 2026 reform left the headline rate untouched but almost doubled the lifetime exemptions and widened the net for share deals, so anyone planning a sale this year should rerun the numbers rather than rely on an old calculation. This guide sets out how the charge works, which reliefs apply and what a typical sale costs, and our Cyprus tax advisory services team can model your own figures before you sign.
What Capital Gains Tax in Cyprus Applies To
The charge falls on the disposal of immovable property situated in Cyprus, which covers land, houses, apartments and commercial buildings, together with shares in companies that own such assets. Sale is the usual trigger, although an exchange, a transfer for consideration in kind or certain gifts outside the family can also count as a disposal. Liability depends on where the asset lies rather than on where the seller lives, so a London resident selling a Paphos villa is caught exactly as a Nicosia resident would be.
Excluded from the charge are shares listed on a recognised stock exchange, overseas real estate, bonds and most portfolio investments. Crypto disposals follow a separate regime under income tax, taxed at 8% from 2026, which means they never enter this calculation.
How the 20% Charge Is Worked Out
Tax is levied at a single rate of 20% on the taxable gain, with no bands and no surcharge, and gains are measured only since 1 January 1980. For immovable property bought before that date, the starting point is its market value on the first day of 1980; for anything acquired later, the base is the purchase price.
That cost is then uplifted for inflation using the consumer price index, from the month the money was spent until the sale, which protects owners from paying tax on increases that merely reflect rising prices. Capital improvements are indexed on the same basis, provided they are documented, while routine repairs and maintenance do not qualify. Incidental expenses such as legal costs, agent commission, valuation charges and the transfer fees paid on purchase are also allowable, so a well-kept file of invoices translates directly into a lower bill.
Once the indexed acquisition cost, improvements and selling expenses are deducted from the sale price, what remains is the gain before reliefs, and any unused personal allowance is applied next.
The New Lifetime Exemptions From 1 January 2026
The reform, published in the Official Gazette on 31 December 2025, raised all three personal allowances for disposals made in the new year:
| Relief | Before 2026 | Current figure |
|---|---|---|
| General exemption, any disposal by an individual | €17,086 | €30,000 |
| Agricultural land sold by a farmer | €25,629 | €50,000 |
| Principal home, after five years of residence | €85,430 | €150,000 |
Each figure is a lifetime exemption rather than an annual one, and they cannot be stacked: relief claimed on an earlier sale reduces what remains, and the overall ceiling is €150,000 per person. Spouses who own a property jointly each have their own allowance, which can make a meaningful difference on a family house.
Claiming the residence relief requires the seller to have lived in the property as their own home for at least five years before selling, and the evidence (utility bills, civil registry records, correspondence at that address) should be gathered well before contracts are exchanged. Companies receive no personal allowances whatsoever, which is one reason why holding Cyprus real estate personally or through a company deserves careful thought at the point of purchase rather than at exit.
Property-Rich Company Shares and the New Threshold
Disposing of a stake instead of the building itself used to escape the tax unless the company’s worth came mainly from land and buildings on the island. Under the new rules, a share disposal is caught where at least 20% of its value derives, directly or indirectly, from immovable property on Cypriot soil, down from the previous 50% test. Holding structures that combine trading assets with a modest portfolio of buildings may now be within scope for the first time, so groups planning an exit or restructuring should value the underlying assets before agreeing a price.
Transfers of real estate or shares between spouses, from parents to children and to relatives up to the third degree remain exempt, as do transfers on death and qualifying reorganisations under the EU Merger Directive.
Worked Example: Selling a Limassol Apartment
Consider a typical client who bought a two-bedroom flat in Limassol in 2014 for €280,000, spent €20,000 on a new kitchen and bathrooms in 2018, and sells in 2026 for €420,000, paying €12,600 in agent commission. The figures below assume an illustrative uplift of 15% on the purchase and 10% on the works; the real factors come from the official index for each relevant month.
| Item | Amount |
|---|---|
| Sale proceeds | €420,000 |
| Indexed purchase cost (€280,000 uplifted by 15%) | €322,000 |
| Indexed improvement cost (€20,000 plus 10% indexation) | €22,000 |
| Agent commission | €12,600 |
| Gain before relief | €63,400 |
| General exemption | €30,000 |
| Taxable gain | €33,400 |
| Tax at 20% | €6,680 |
Had the owner lived there for five years as a principal residence, the €150,000 relief would have covered the whole gain and nothing would be payable. The seller’s levy described below would still apply, adding €1,680 on these numbers.
Selling as a Non-Resident
Residence makes no difference to whether the charge arises, because it attaches to the immovable property itself. Non-resident sellers still benefit from indexation and the €30,000 general allowance, although they usually cannot claim the home relief, since the property will rarely have been their main residence. Whether the profit is also taxed in the seller’s own country depends on its domestic rules and on its double tax treaty with Cyprus, so UK and EU owners should check how their own tax authority treats the disposal and whether credit is given for tax already paid here.
A common pattern among clients we see is a British owner who has relocated to Limassol under the non-dom programme and is selling a buy-to-let flat bought years earlier. Non-dom status does not reduce the charge, since it concerns dividends and interest, yet becoming Cyprus tax resident before the sale can change how the gain is treated back in the UK, which is why the order of moving and selling matters.
Other Costs a Seller Should Budget For
Beyond the gain itself, two further items regularly surprise sellers. A 0.4% levy is charged on the sale value of every disposal, paid by the seller into a fund that compensates people displaced in 1974. Stamp duty on the contract, by contrast, has been abolished, so it no longer adds to the cost of signing.
Tax clearance is the practical gatekeeper in Cyprus. The seller files a return with the Tax Department, supported by the contract and proof of costs, the liability is assessed and settled, and only then will the Land Registry complete the transfer of title. Since the reform the Tax Commissioner can also refuse consent where either party is behind with their filings, so buyers and sellers alike benefit from settling any open returns first. Legal conveyancing is handled by our partner law firm, Nicholas Ktenas & Co., LLC, which works from the same Nicosia office and serves our clients alongside us as one team.
Frequently Asked Questions
Are you taxed on every capital gain in Cyprus?
No. Only gains on Cypriot real estate and on shares deriving at least a fifth of their value from it are within the charge, while listed shares, foreign assets and the bulk of portfolio investments fall outside it.
How do you calculate the gain on a property sale?
Deduct the indexed cost, documented works and the costs of selling from the proceeds, then subtract any unused lifetime allowance and apply the rate to what remains.
Can I reduce the bill legitimately?
Keeping every invoice, claiming residence relief where you qualify, timing gifts within the family and reviewing how a holding company is valued before a share sale are all legitimate ways to lower the amount payable.
Does Cyprus charge tax when I inherit property?
No. Inheritance falls outside the charge, and Cyprus has no inheritance tax, although a later sale by the heir is assessed using the value at the date of death as the starting cost.
Plan Your Sale With Capital Gains Tax in Cyprus in Mind
The higher allowances make 2026 a better year to sell than most, yet the tighter share-deal test and the clearance requirement mean the paperwork deserves as much attention as the price. If you are preparing to sell property or shares in Cyprus, speak to our tax advisers in Nicosia, and read our guide to Cyprus property investment and residency if you are also reinvesting locally.