Tax Guide

Cyprus’s tax system is similar to that of the UK. There is a double taxation agreement between the two countries, meaning that tax is paid in one or other country, not both, and usually where the higher tax is levied.

Income tax: is charged only on income earned in Cyprus. This includes income from letting property, which is taxed in progressive rates of up to 30%, depending on level of income.

A foreign national staying in Cyprus for more than 183 days during a tax year (1 January to 31 December) is considered a resident. The 183 days need to be consecutive. Residents are subject to progressive taxation on worldwide income, with the highest rate at 30%

Capital Gains tax: at 20% is based on the increase in the price of the property, with the first CY£10,000 (c. £12,000 sterling) being exempt. In addition, the full value of the property may be transferred abroad out of Cyprus at the time of completion, if you are selling.

Inheritance tax: There is no inheritance tax or Gift Tax in Cyprus. This was abolished in January 2000

Local tax -Local Authority Tax – this is similar to the English Council Tax - usually around just CYP 30–100 per year.

Property taxes

Stamp duty: CY£1.50 per CY£1000 up to CY£100,000, then CY£2 per CY£1000 – therefore for a 3 bed villa this will be approximately CY£320 i.e. 100x1.5 plus 85x2 for CY£185,000.

Immovable Property Ownership Tax: this is an annual tax that depends on the value of the property. For properties up to CY£250,000, this is 0.25% of the value of the property, therefore for a 3 bed villa, this would be approximately CY£460.

Municipality Tax: there may also be an annual charge levied by the municipal authorities of circa CY£20-30 (c.£24-36 sterling), as may sewerage tax of CY£20-40 (c.£24-48 sterling)duty)

VAT: VAT at 15% on new-build properties only. (A reduced rate of 5% VAT is charged on some products, mainly food and agricultural products)