Selling property in Cyprus: capital gains tax at 20%, the 2026 exemptions and the UK side of the bill

The tax on selling a property in Cyprus is paid years after the purchase, but it is shaped on the day you buy: by which papers you keep, and by whether the property becomes your main home.

The rules below are those of the Capital Gains Tax Law 52/1980 as amended by Law 242(I)/2025, in force from 1 January 2026, and of the Tax Department's own guidance. Every figure is the position as at 25 September 2026.

The numbers for 2026

The reform left the rate alone; it moved the exemptions, the share threshold and the penalties.

What is taxed

The tax falls on the gain from disposing of "property" as the law defines it:

• ·immovable property situated in the Republic of Cyprus;
• ·shares in companies that own Cyprus property;
• ·shares in companies that own Cyprus property through other companies, where that property makes up at least 20% of the market value of the shares;
• ·rights under a contract to buy Cyprus property.

A disposal includes a sale, the sale contract itself, an assignment of the rights under that contract, an exchange and a gift. The assignment point matters to anyone who buys off-plan. Sell your apartment before the title deeds are issued, by assigning your contract to a new buyer, and that is a taxable disposal on the same basis. How contracts and title deeds work is covered in our guide to title deeds and the sale contract.

Capital gains tax or income tax

Capital gains tax applies only where the gain is not taxed as income. If buying and selling property looks like a business, the Tax Department can tax the profit as trading income. Its published tests include how long you held the property, how often you do similar deals, how you financed it and what work you did before selling.

How the gain is worked out

Five steps:

1. 01Sale price — the amount the parties declare. The Tax Department has six months to challenge it, and charges tax plus interest on any proven understatement.
2. 02Acquisition cost — the purchase price and the cost of improvements, indexed to Cyprus consumer prices.
3. 03Costs of buying and selling on the Tax Department's list — deducted as they are, without indexation.
4. 04Lifetime exemption — €30,000, or €150,000 if the main-home conditions are met.
5. 0520% of what is left.

Indexation

The acquisition cost and improvement costs are uprated by the Cyprus consumer price index. The Tax Department's formula:

indexed cost = cost × index for the month before the sale ÷ index for the month of purchase

For the sale you use the previous month's index, since the current one is only calculated at month end. For the purchase, the index of the month it happened; for improvements, the month the work was finished. The Tax Department publishes the index back to 1979.

From January 2021 to August 2026 the index rose by 22%, and a purchase cost from January 2021 rises by the same 22% for tax.

Costs you can deduct

The Tax Department gives two lists. The first is part of the acquisition cost and is indexed:

• ·the purchase price;
• ·the cost of dividing a plot;
• ·the cost of building the house or extensions;
• ·improvements that add value, such as a pool or central heating;
• ·part of the cost of renovation, under conditions.

The second is deducted as it stands, without indexation:

• ·transfer fees;
• ·advertising;
• ·valuation;
• ·the costs of the sale itself;
• ·interest on a loan taken to buy the property;
• ·legal fees for the sale;
• ·a registered estate agent's commission.

Any cost counts only if it was incurred wholly for this deal and you can document it.

If you sell at a loss

A loss is worked out the same way as a gain. If it cannot be set against a gain on another sale at the same time, it is carried forward against future gains until it is used up.

The 2026 exemptions

Every individual can reduce a taxable gain by a lifetime exemption. Companies get none.

• ·€30,000 — on a gain from selling any property.
• ·€150,000 — on a gain from selling your main home.

The €150,000 needs three conditions to hold:

1. 01you owned the home and lived in it yourself, solely as your own residence, for at least five years in total — ten years if you have sold a main home before;
2. 02the plot is no larger than 1,500 m²; the share of the gain on land beyond that is taxed;
3. 03less than a year has passed since you stopped living there.

Two further rules:

• ·The two exemptions do not stack. You get one of them, whichever is larger, and the overall cap per person is €150,000. The Tax Department's own example: someone who used the full €30,000 on a sale of land can claim at most €120,000 on a later sale of their main home.
• ·Any unused part of the exemption carries forward to your next sale.

For a British buyer this comes down to one question. Retire here and make the apartment your home, and five years of living in it opens the €150,000. Keep it as a holiday home, and you have the €30,000.

A worked example

You buy an apartment in 2026 for €300,000 and sell it five years later for €380,000 — a number for the arithmetic, not a forecast. There is no indexation, because the 2031 index is not yet known, and no buying or selling costs, which would lower the gain.

The €10,000 between the two columns comes entirely from five years of living in the apartment.

What indexation does, with real index figures

Same prices, different dates: bought in January 2021 for €300,000, sold in September 2026 for €380,000. In the Tax Department's table the January 2021 index is 218.78 and the August 2026 index — the month before the sale — is 267.18.

• ·Indexed cost: €300,000 × 267.18 ÷ 218.78 = €366,368.
• ·Gain: €380,000 − €366,368 = €13,632.
• ·That is inside the €30,000 exemption, so no tax, and €16,368 of the exemption is left for a future sale.
• ·The 0.4% levy is still €1,520: it is charged on the price, not the gain.

Without indexation the gain would have been €80,000 and the tax €10,000.

When no tax is due

The Tax Department lists the following as exempt, subject to the conditions in the law:

• ·passing property on death;
• ·gifts from parents to children, between spouses and between relatives up to the third degree;
• ·a gift to a foster child, or to a company whose shareholders stay within the donor's family for five years;
• ·gifts to the state, and gifts for educational, cultural or charitable purposes to local authorities or to charities approved by the Council of Ministers;
• ·an exchange of properties of equal value;
• ·compulsory purchase;
• ·transfers between former spouses after a divorce;
• ·transfers in a company reorganisation.

The exemption has a second half. Whoever inherits a property, or receives it as a gift from a relative, calculates the gain on a later sale from what the deceased or the donor originally paid, not from the market value on the day they received it.

A gift to anyone outside that circle is taxed, with the market value on the day of the gift, as assessed by the Tax Department, standing in for the sale price.

Who pays, when and how

• ·The seller pays; the buyer has no capital gains tax to pay.
• ·The return is form T.F. 401, filed with questionnaire T.F. 413, the sale contract and proof of what you paid and when — the title deed or purchase contract; to deduct interest, the loan agreement and the bank's yearly interest statements. A transfer of title also needs form N 313; an assignment needs copies of the assignment and the original sale contract.
• ·The deadline is one month from the disposal, and in any case before title is transferred at the Land Registry. The tax is paid within the same month, online through the Tax Portal or at a Tax Department district office.
• ·A Cyprus tax number is needed to file. If you do not have one, you obtain it first.
• ·Penalties from 2026: €250 for an individual's late return; 5% of the tax for late payment, and a further 5% if it is still unpaid two months after the deadline; plus interest at the public default rate.

The 0.4% levy

The levy is imposed by Law 141/1989 on the Central Agency for Equal Distribution of Burdens. Under section 4(2) the money funds support for owners of property that has been inaccessible, or impossible to use, since the Turkish invasion of 20 July 1974.

• ·The rate is 0.4% of the sale price. The gain makes no difference.
• ·The seller pays.
• ·The Tax Department collects it at the transfer. Since 21 November 2022 the Land Registry has not registered a transfer by sale without a Tax Department certificate that the levy has been paid or is not due.
• ·It does not apply in a company reorganisation, or, under a restructuring of non-performing loans, to the part of the price that goes to repay them.

If you do not live in Cyprus

The tax is charged on gains from Cyprus property whatever the seller's tax residence, individual or company, subject — as the Tax Department puts it — to double tax treaties.

The lifetime exemptions go to any individual, with no residence condition, but the main-home exemption needs five years of living there yourself.

If you are UK tax resident: the other half of the bill

Under Article 13 of the 2018 UK–Cyprus Double Taxation Convention, a gain a UK resident makes on property situated in Cyprus may be taxed in Cyprus. Cyprus keeps the right to charge its 20%.

The UK then taxes the same gain. For a house abroad, GOV.UK guidance is that you pay tax in both countries and get relief from the UK; under Article 22 of the convention the Cyprus tax is credited against UK tax on the same gain.

• ·If the UK tax on the gain comes out higher, you pay the difference in the UK. For 2026–27 UK rates on gains are 18% and 24%, depending on your income, with a £3,000 tax-free allowance.
• ·If the UK tax comes out lower, the extra Cyprus tax is not refunded: GOV.UK notes you may not recover the full foreign tax where the UK rate would have been lower.

You claim the credit when you report the gain on your UK return. If you have already moved to Cyprus and are no longer UK resident, whether the UK has any claim depends on your residence history — a question for an adviser who knows both systems.

What this means if you buy a new build now

The tax on the way out is worked out from the papers you collect on the way in. For the owner of a new build that means:

1. 01the sale contract and proof of every payment — they show the price, and the date of purchase fixes the index used for uprating;
2. 02the loan agreement and the bank's yearly interest statements;
3. 03invoices for improvements — a pool, heating, other work that adds value;
4. 04Land Registry receipts for any transfer fees you paid.

No document, no deduction. What you pay at the purchase is in our guide to the cost of buying property in Cyprus; how off-plan payments are staged, in how off-plan works.

If you buy at the reduced 5% VAT rate, that relief has its own conditions on selling early; they are covered in our article on VAT on new-build property.

If you are buying to let, the tax on exit belongs in the same calculation as the rent. The published gross yields for Paphos apartments and current asking rents are in our article on investment property in Cyprus; tax on the rent itself is a separate matter, covered in Cyprus tax in 2026.

These are the rules, not a calculation of your sale. Have that done by a tax adviser with Cyprus practice before you sell, while missing papers can still be found. How we check the figures in our articles is on our fact-checking page.

We build in Paphos, and what we are responsible for is where this calculation starts: the contract and the registration at the Land Registry. What is available now, and at what price, is in the catalogue.