Non resident property owners in Cyprus are only obligated to file an income tax return to the Cypriot tax authorities, if their income exceeds €19,500. If you spend more than 183 days in Cyprus, or hold a primary residence there, you will be classed as resident for tax purposes.
Cypriot taxes payable when owing a property are as follows:
Cyprus - Income Tax:
Rents from Cyprus only are subject to Cyprus income tax.
You will be entitled to the following yearly allowances:
b) A deduction for the total interest paid for the acquisition of the property rented.
c) Capital allowances of 3% on the cost of the rented property (for 33 years from the date of purchase).
The following income tax rates apply to individuals:
|Chargeable||Income Tax||Rate Accumulated||Tax|
|€0 – €19.500 |
€19.501 – €28.000
€28.001 – €36.300
Special Defense Contribution
Cypriot Tax ResidentGross Rents from Cypriot sources or outside Cyprus, after being reduced by 25% are subject to a special defense contribution of 3%.
Non-residents are not liable to special defense contribution.
The special defense contribution is payable by the recipient of the rent in two installments on the 30th June and the 31st December each year.
Cypriot Corporate Income Tax
Cypriot Corporate Income Tax is payable if property is purchased through a company and is calculated @ 10% on the company profits after costs.
Cypriot Immovable Property Tax
The annual Cypriot immovable property tax is imposed on the market value of the property as at 1st January 1980 and applies to the immovable property owned by the taxpayer on 1st January each year.
| Market Value of Property |
|Annual Property Tax (%)|
|up to 170.860 |
170.860 to 427.150
427.151 to 854.300
|0 % |
Cypriot Capital Gain Tax
Cypriot Capital Gains Tax is payable by both residents and non-residents alike at a rate of 20%. Subject to certain conditions, you may claim the following deductions:
Up to €85,430 if the disposal relates to a private residence.
Up to €25,629 if the disposal is made by a farmer and it relates to agricultural land.
Up to €17,086 on any other disposal.
The maximum deduction granted cannot exceed €85,430, which can be used over a lifetime until exhausted.
Stamp Duty on Contracts
Stamp duty needs to be paid within 30 days of signing the contract of sale. The purchaser will pay stamp duty at the following rates:
ContractsFor amounts up to € 170.860 0, 15%
For amounts over € 170.860 0, 20%
Plus € 256, 29
(Maximum Fee € 17.086)
Cypriot real Estate Transfer fees are due when the transfer takes place and the title deeds are transferred into the new owners name. The rates of stamp duty payable go on a graduated scale as follows:
| Value of property |
up to €85.430
from €85.431 to €170.860
from €170.861 and over
| Transfer Fee Rate |
If the property is in joint names e.g. of a couple (husband and wife) or two individuals, then the purchase value is divided into two parts which results in reduced transfer fees.
Non-Resident property owners may be liable to declare Cypriot rental income as worldwide income within their annual tax return.
UK and Irish residents are obliged to declare Cypriot sourced income in their annual resident tax return. There is a Double Tax Treaty agreement between Cyprus, Ireland and the UK so relief for certain Cypriot taxes will be given against UK/Irish taxes payable on your Cyprus property.
Property Tax International specialise in the completion and filing of non-resident Cypriot income tax returns. PTI also provide a complete range of UK and Irish domestic tax filing services for the self-assessed and self-employed.