Capital gains tax on Cyprus property has become more favourable for many homeowners in 2026. Under the tax reform that took effect on 1 January 2026, the exemption for the sale of a main residence rose from €85,430 to €150,000, and the other exemptions also increased. This guide explains how capital gains tax works for Cyprus property sellers as of September 2026, what changed and what to prepare before you sell.
How capital gains tax on Cyprus property works
Capital gains tax in Cyprus is charged at 20% on the gain made when property in Cyprus is disposed of. It is a tax on the profit, not on the sale price, and it is separate from income tax.
The tax can also reach indirect disposals, such as the sale of shares in a company that holds Cyprus property. The 2026 reform widened that rule, as we explain below.
The reform was passed on 22 December 2025 and came into force on 1 January 2026; the capital gains tax changes are in Law 242(I)/2025. It covered much more than property, but for sellers the headline change is the size of the exemptions.
The new €150,000 main residence exemption and other allowances
Individuals can reduce their taxable gain using lifetime exemptions. From 1 January 2026, all three have been raised substantially.
| Exemption | Before 2026 | From 1 January 2026 |
|---|---|---|
| Sale of main residence | €85,430 | €150,000 |
| General lifetime exemption | €17,086 | €30,000 |
| Agricultural land sold by farmers | €25,629 | €50,000 |
The main residence exemption is not automatic. Under the Capital Gains Tax Law, the conditions include:
- you used the home exclusively as your own residence for a total of at least five years (at least ten years if you are selling a main residence for a second time or more);
- the exemption covers land of up to one and a half decares, with tax due on the proportion of the gain relating to any excess land;
- no exemption is given if you sell after at least a year has passed since you stopped living there.
The exemptions cannot simply be added together. The law allows either the main residence exemption or the general (or farmland) exemption, whichever is greater, and PwC describes an overall lifetime maximum of €150,000. How an exemption used on an earlier sale affects you is a question for a tax adviser.
Who benefits most from the higher exemptions
Homeowners selling the property they live in are the most obvious group, since the main residence exemption has risen from €85,430 to €150,000. Owners of a second home or an investment property may benefit from the higher general lifetime exemption, while farmers whose main occupation is farming have a larger €50,000 allowance for agricultural land.
Timing matters too. The amending law took effect on 1 January 2026, and some advisers link the new amounts to sale contracts signed from that date. If your sale agreement was signed before 2026, ask your adviser which figures apply. If you are only now thinking about selling, the 2026 amounts are the relevant starting point.
“Speak to a tax adviser before you agree a sale, not after. Knowing which exemptions you can use makes it easier to plan your next move with confidence.”
John Theodorou Group
Property-rich companies: a lower threshold
Capital gains tax also reaches the sale of shares in companies that own Cyprus property. Where a company holds the property indirectly, for example through a subsidiary, PwC reports that the tax applies when at least a set proportion of the shares’ market value derives from Cyprus property. Before 2026 that threshold was 50%; from 1 January 2026 it is 20%.
This brings more share sales into scope, particularly where a company holds Cyprus property alongside other assets. If you own property through a company, it is worth reviewing the structure with your adviser.
Other points for sellers in 2026
Selling a property involves a contract, and there is some good news here too. Stamp duty has been abolished for property contracts signed from 1 January 2026, so neither party faces that charge on a new sale agreement.
A sale is also generally more straightforward when separate title deeds exist and the property is free of mortgages or encumbrances, because these are among the first things a buyer’s lawyer will check. Our guide to the process of issuing title deeds in Cyprus explains the background.
If you are selling in order to buy your next home, the costs on the buying side follow different rules. Our breakdown of the cost of buying property in Cyprus covers VAT, transfer fees and legal costs, and our guide to 5% reduced VAT on a main residence explains when a lower VAT rate may apply to a new home.
What to prepare before you sell
Good preparation makes the tax position clearer and the sale smoother. Before you agree a price, it helps to have the following ready:
- Your original purchase documents, including the contract, the price paid and the date of acquisition.
- Evidence supporting main residence use, if you intend to claim that exemption.
- Details of any capital gains tax exemptions you have used on earlier disposals.
- Title deed and Land Registry information, so a buyer’s lawyer can complete their checks.
- A calculation of the expected tax from a qualified tax adviser, based on your own facts.
The Tax Department is the official source for capital gains tax rules and procedures.
Frequently asked questions
What is the capital gains tax rate on property in Cyprus?
Capital gains tax is charged at 20% on the gain from disposing of property in Cyprus, after any exemptions that apply.
How much is the main residence exemption in 2026?
From 1 January 2026, it is €150,000, up from €85,430. Conditions apply, including at least five years’ use as your own residence.
Can selling company shares trigger capital gains tax?
Yes. For companies holding Cyprus property indirectly, the threshold fell from 50% to 20% of the shares’ value from 1 January 2026.
If you are planning to sell and move into a new home in Limassol, we would be glad to talk through the buying side of your plans. Get in touch with our team to start the conversation.
This article is for general information only and reflects our understanding of the rules as of September 2026. It is not legal, tax or financial advice. Rules change, so please confirm the details with an independent lawyer or tax adviser before making decisions.
