One of the most common questions buyers ask before purchasing property in Cyprus is simple but important: how much will I actually pay on top of the purchase price? Understanding the taxes and fees involved is essential for budgeting correctly and avoiding surprises. Here is a clear breakdown of what buyers should expect in 2026.
The Main Taxes and Fees When Buying
There are two primary scenarios depending on the type of property you are purchasing.
New Builds: VAT Applies
VAT is applied at a rate of 19% on newly built properties. However, Cyprus legislation allows a reduced VAT rate of 5% for buyers who purchase a property as their primary residence, subject to certain conditions.
The reduced rate typically applies to the first 130m² of the property used as the buyer’s main residence, with limitations on the total covered area and the overall value of the property.
Resale Properties: Transfer Fees Apply
For properties where VAT is not applicable, which is usually the case for resale properties, buyers are required to pay transfer fees to the Cyprus Land Registry. The transfer fee scale is currently:
- 3% on the first €85,000
- 5% on the amount between €85,001 and €170,000
- 8% on any amount above €170,000
When VAT is not payable, the Cyprus Land Registry currently applies a 50% reduction on transfer fees, which can significantly reduce the total cost for buyers purchasing on the secondary market.
If a property is purchased in joint names, the purchase value is effectively divided between the buyers for transfer fee calculation purposes, which can further reduce the total transfer fees payable.
Stamp Duty
Stamp duty in Cyprus remains relatively low and is calculated on a sliding scale based on the value of the purchase contract. Although it represents an additional cost, it is generally modest compared to similar charges in other European property markets.
Capital Gains Tax When Selling
Cyprus applies a capital gains tax of 20% on profits from the sale of immovable property. The tax is calculated on the gain after allowable deductions and applicable exemptions. Allowable deductions may include:
- legal expenses
- transfer costs
- inflation adjustments
- certain improvement or renovation costs
Certain transfers, such as between spouses or from parents to children, may be exempt or subject to reduced charges.
No Annual Property Tax
One of the most attractive aspects of owning property in Cyprus is that the Immovable Property Tax was fully abolished in 2017 and has not been reinstated. As of 2026, there is no annual state-level immovable property tax, which remains a significant advantage compared to many other European countries.
Final Thoughts
Cyprus has one of the most transparent and buyer-friendly property tax frameworks in the Mediterranean. With relatively low stamp duty and clear rules around VAT and transfer fees, the buying process is straightforward when guided by the right professionals.
Always work with a qualified lawyer and a trusted real estate advisor to ensure you fully understand your obligations before signing. The right advice at the right time can help you avoid unnecessary costs and complications.
If you are considering buying property in Cyprus and would like personalised guidance, the team at M.H Real Estate can assist you through every stage of the purchase process.
*This article is for general information only and should not be considered legal or tax advice.
