Selling Property in Cyprus: Capital Gains Tax, Exemptions and the Transfer Process to the Buyer

1How much tax do you pay on selling property in Cyprus?

A gain on the sale of immovable property in Cyprus is subject to capital gains tax (Capital Gains Tax) at a rate of 20%, regardless of whether the seller is a Cyprus resident. The tax applies to property located in Cyprus and also to shares of a company that holds real estate in Cyprus, and it is collected only when the sale is not subject to income tax, that is, when the seller is not engaged in trading in real estate.

Most investors come to the question of sale years after the purchase, and discover that the rules have changed in the meantime. The tax reform that took effect on 1 January 2026 changed several important parameters, mainly the exemption amounts, so even someone who ran the numbers two years ago needs to run them again.

2How is the taxable gain calculated?

The taxable gain is the sale proceeds less the acquisition cost and the cost of improvements, with the costs indexed to the Cyprus consumer price index, and less expenses related to the purchase and the sale. From this gain the lifetime exemption is deducted, if it has not yet been used.

1. Sale proceeds: the price in the contract.
2. Less indexed acquisition cost: the purchase price, indexed to the Cyprus consumer price index from the month it was incurred to the month of sale. For property acquired before 1 January 1980, the cost is the value as assessed by the Land Registry as of that date.
3. Less indexed improvements: documented capital improvements, such as an extension or a swimming pool. Repairs and ongoing maintenance are not considered improvements.
4. Less incidental expenses: transfer fees, lawyers' fees, brokerage commission and, under certain conditions, interest on a loan.
5. Less the lifetime exemption you have remaining.
6. On the balance: 20%.

3What capital gains tax exemptions apply in Cyprus in 2026?

From 1 January 2026 the lifetime exemptions for individuals were raised significantly. The exemption is not annual: it is a cumulative lifetime amount, and each use reduces the balance.

The main residential home exemption carries conditions of ownership and actual residence over a period of time, and according to professional reviews non-residents generally cannot benefit from it. Spouses are each entitled to their own exemption. Beyond the monetary exemptions, the law also exempts certain transfers: a gift between spouses, to children and to relatives up to the third degree, a gift to a family company, an exchange of properties under certain conditions, and property acquired at market price from an unrelated party between 16 July 2015 and 31 December 2016.

4What else does the seller pay besides capital gains tax?

• A levy of 0.4% of the sale price. Since 22 February 2021, the sale of real estate in Cyprus has been subject to a levy of 0.4% of the consideration, for the benefit of a fund for the equitable sharing of burdens. The seller pays it, and since 18 November 2022 it also applies to the sale of shares in companies that hold real estate.
• VAT, if the sale is taxable. The first sale of a "new" building is subject to VAT. From 1 September 2026, "new" is determined by a usage test: a sale before first occupation is subject to VAT, and "first use" is defined as systematic use for at least 18 months. A seller who is not a contractor may also be required to register for VAT under certain conditions, so anyone selling an apartment that has hardly been used should check this in advance.
• Income tax instead of capital gains tax, for developers. Someone whose business is trading in real estate is taxed on the profit as business income: an individual according to the tax brackets (up to 35%) and a company at 15%. An Israeli investor who buys and sells several properties in Cyprus within a short time needs to check how their activity will be classified.
• Stamp duty, abolished. From 1 January 2026 the Stamp Duty Law was abolished, and sale contracts are no longer subject to it in most cases.

5A numerical example: how much tax will the seller pay?

An example for illustration only, with hypothetical data. An Israeli investor bought a second-hand apartment in Cyprus and sells it in 2026 for EUR 340,000. Assume that the acquisition cost, after indexation, is EUR 265,000, and that the documented incidental expenses (fees, lawyers and brokerage) are EUR 10,000. This is his first sale in Cyprus, and he is not entitled to the main residential home exemption.

Before the reform, with a general exemption of EUR 17,086, the same seller would have paid capital gains tax of about EUR 9,583. The difference is not dramatic, but it shows that it is worth recalculating under the current rules.

6When is the tax paid and how does it relate to the transfer of ownership?

Capital gains tax on the sale of real estate is generally paid within 30 days of the date of sale, on the basis of a declaration submitted to the tax authority, and the Land Registry does not register the transfer without confirmation that the tax has been settled. According to a professional publication, the date of sale for tax purposes is the date of the sale contract, not the date the title deed is actually transferred. Late payment incurs a penalty and interest under the rules. In addition, the 2026 reform authorized the Tax Commissioner to withhold his consent to the transfer of a property where one of the parties, the seller or the buyer, does not meet their tax obligations.

7What does the transfer process to the buyer look like, step by step?

1. Preliminary check by the seller: the title deed in your name, removal of mortgages and encumbrances, completion certificate, and payment of debts to the local authority, the sewerage board and the homeowners' committee.
2. Sale contract: drafting and signing, while the buyer's lawyer carries out his due diligence.
3. Deposit of the contract at the Land Registry by the buyer, to protect him until the transfer.
4. Permit to purchase for a foreigner, if the buyer is not a citizen of the European Union.
5. Filing of the capital gains declaration and payment of the tax and levy by the seller, and receipt of confirmations.
6. Payment of the transfer fees by the buyer: 3% up to EUR 85,000, 5% from EUR 85,001 to EUR 170,000 and 8% above that, with a 50% reduction where the purchase is not subject to VAT, and no fees where it is subject to VAT.
7. Registration of the transfer at the Land Registry and issuance of a title deed in the buyer's name, and receipt of the balance at the same time.

8How is the sale taxed in Israel?

An Israeli resident who sells property in Cyprus must report the sale in Israel, and the real gain is subject to capital gains tax at a rate of 25%, with a credit for the tax paid in Cyprus. Because the property is located outside Israel, the sale is taxed under the Income Tax Ordinance, and not under the Land Taxation Law that applies to property in Israel.

• No treaty. There is no double taxation treaty between Israel and Cyprus, so the credit in Israel is granted under Israeli law, up to the amount of the Israeli tax on the same gain.
• The Israeli calculation differs from the Cypriot one. In Israel the real gain is calculated under the rules of the Ordinance, with exchange rates and indices that differ, so the gain in Israel may differ from the gain calculated in Cyprus. The Cypriot exemption is also not recognized in Israel.
• Depreciation that was deducted. Someone who rented out the property and deducted depreciation in Israel will see the depreciation reduce the cost for the purpose of calculating the gain.
• Reporting dates. The sale is included in the annual return. You should check with your tax adviser whether a report and an advance payment are also required close to the sale.

The practical meaning: if the tax in Cyprus is lower than the Israeli tax on the same gain, for example thanks to the lifetime exemption, the difference will be paid in Israel. If the tax in Cyprus is higher, the excess is not refunded. It is therefore important to calculate the sale in both countries before setting a minimum price.

9What to do before signing, and how we accompany you

Before the property is put on the market, we check its legal status (title deed, encumbrances, completion certificate), calculate the tax in Cyprus and in Israel together with the accountants, and check whether there is exposure to VAT or to classification as a trader. We then accompany the negotiation, draft the sale contract, coordinate the tax payments and confirmations with the authorities and the transfer at the Land Registry, including a power of attorney for those selling from Israel.

Read next · 8 min readLand Registry Transfer Fees and Stamp Duty in Cyprus: Calculation, Exemptions and DiscountsHow much Cyprus Land Registry transfer fees cost, when a 50% reduction or exemption applies, and what happened to stamp duty from January 2026, with examples.Read the guide

The information in this guide is general in nature and does not constitute legal or tax advice on any specific transaction. Every transaction is assessed on its own facts.