Capital Gains Tax in Cyprus

Updated: October 15, 2026

Capital Gains Tax (CGT) in Cyprus is a tax levied on the profit from selling real estate – the gain (profit) that is taxed and not the whole received amount. Capital gain is calculated from the increase in value of the sale price as compared to the value of the property on 1 January 1980 or the cost as adjusted for inflation if the date of acquisition is later.

Spending on additions and improvements made wholly and only to earn the gain is deductible too, adjusted for inflation. The seller files a return with the Tax Department and pays the tax within one month of the disposal, and in any case before the property is transferred. Signing a sale agreement already counts as a disposal.

Cyprus has one CGT rate, 20%, whatever the holding period.

Property on which CGT is paid in Cyprus is:

immovable property in the Republic,
shares in companies that own immovable property in the Republic,
shares in companies that participate in a company or companies that own immovable property in the Republic, where at least 20% of the market value derives from this property,
agreements to sell property in the Republic.

Read more about other property taxes in Cyprus.

How much is capital gains tax?

Capital gains tax in Cyprus is 20% unless your case falls within the exemptions or allowances.

Exceptions

Exceptions to the duty to pay CGT include, among others:

transfer on death,
gifts between spouses, parents, children and relatives up to the third degree of kindred,
gifts from a parent to a child placed with them under Part III of the Children Law,
gifts to the Republic, and gifts for charitable purposes, such as education and culture, to a local authority or to a charity in Cyprus approved by the Council of Ministers.

Allowances

Individuals receive lifetime allowances to reduce the taxable gain. They cannot add the main home allowance to the general one: the total used over a lifetime cannot exceed €150,000. The amounts rose on 1 January 2026, and a person who used part or all of the lower amounts before that date can claim the difference on disposals made from that date:

A lifetime allowance is €30,000 on the taxable gain from the sale of any property.
A lifetime allowance is €150,000 on the taxable gain from selling a primary residence. The owner must have used the home only as their own residence for a total of at least five years, or ten years from their second sale of a home onwards. No allowance is given if the home is sold a year or more after the owner stopped living in it. On a plot above 1.5 decares, the gain from the extra land is taxed.
An allowance is €50,000 on the gain from agricultural land sold by an individual whose main occupation is farming.

The main home allowance covers a home on up to 1.5 decares (1,500 square metres) of land. If the plot is larger, the part of the gain that comes from the land above 1.5 decares is taxed.

CGT calculation example

An individual sells their primary residence, which they have lived in for 10 years, for €500,000. The indexed purchase cost was €250,000.

Capital gain: €500,000 - €250,000 = €250,000
Applicable lifetime allowance: €150,000
Taxable gain: €250,000 - €150,000 = €100,000
CGT due: €100,000 * 20% = €20,000

How inflation adjustment works

When calculating Capital Gains Tax, the "cost as adjusted for inflation" is the original purchase price (or the 1 January 1980 value for older property) plus qualifying improvement costs, each increased by inflation up to the date of disposal. Inflation is measured with the official Consumer Price Index (CPI) of Cyprus.

This way, sellers are taxed only on the real increase in the property's value, not on gains that result from general inflation over time.

Relevant legislation

The relevant legislation for CGT in Cyprus is the Capital Gains Tax Law 52/1980. Its latest amendment, Law 242(I)/2025, came into force on 1 January 2026.

FAQ

How much tax do you pay when you sell a house in Cyprus?

You pay a 20% Capital Gains Tax on the profit from a sale, but every individual can claim specific lifetime allowances:

€30,000 on the profit from any property sale.
€150,000 on the profit from the sale of your primary residence.

The primary residence allowance requires the owner to have used the home only as their own residence for a total of at least five years. From the second sale of a home onwards, the period is ten years.

On a plot larger than 1.5 decares (1,500 square metres), the share of the gain from the extra land is taxed. The total lifetime limit across all allowances is €150,000.

How to avoid capital gains tax?

A gain above your lifetime allowance is taxed. Some transfers do not count as a disposal for CGT, including a transfer on death, a gift between spouses, a gift from a parent to a child or between relatives up to the third degree, and a gift to the Republic.

A transfer on death or a family gift puts the tax off: when the heir or the person who received the gift sells later, the gain is worked out from the earlier owner's cost, or from the 1 January 1980 value if that date is later.

How to decrease capital gains tax?

The tax falls on the gain after deductions. You can claim your lifetime allowance, and you can deduct money spent wholly and only to make the gain, such as improvements, adjusted for inflation. A loss on an earlier property sale is carried forward and set against later gains.

What qualifies as a capital gain?

The capital gain is the sale price minus the cost of the property, adjusted for inflation. The cost is the property's value on 1 January 1980 if it was acquired before that date, or its original cost if it was acquired later. For property owned on 14 July 1974, the owner can choose its market value on that date instead. Improvement costs are deducted too.

Who pays capital gains tax in Cyprus?

The person who disposes of real property (i.e. the seller) pays CGT in Cyprus.

What percentage is capital gains tax?

In Cyprus, the percentage of Capital Gains Tax is 20%.

Disclaimer

The information provided is for general guidance only and does not constitute professional tax or legal advice. Tax laws are subject to change and depend on individual circumstances. Please consult a qualified professional for advice customised to your specific situation.