Capital Gains Tax in Cyprus: What You Need to Know (2026 Update)

Updated: March 31, 2026

Capital Gains Tax (CGT) in Cyprus applies to individuals and companies that earn a profit from selling immovable property located in Cyprus. The tax is charged at a flat rate of 20% on the taxable profit.

It also applies to the sale of shares in companies where at least 20% of the company’s market value comes from immovable property in Cyprus.

Exemptions include:

Shares listed on recognised stock exchanges
Certain transfers, such as inheritances, gifts between close relatives, and other specific cases

If you are selling property in Cyprus for a profit, you will likely need to pay Capital Gains Tax.

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How to Calculate Capital Gains Tax

Capital Gains Tax is applied only on the profit, so the first step is to determine your taxable gain:

Taxable Profit = Sale Price − (Purchase Price + Additional Costs + Lifetime Allowance)
Capital Gains Tax = Taxable Profit × 20%

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Adjusting the Purchase Price for Inflation

The original purchase price must be adjusted to reflect inflation. Money loses value over time, so €100,000 spent in 1985, for example, is worth significantly more in today’s terms.

How to calculate:

Divide the inflation rate in the year of sale by the inflation rate in the year of purchase → this gives the inflation adjustment number.
Multiply the original purchase price by the adjustment number → this gives the inflation-adjusted purchase price.

Example:

Bought in January 1985 for €100,000
Inflation Rate 1985: 97.68
Inflation Rate January 2026: 258.73
Adjustment number: 258.73 ÷ 97.68 = 2.64875
Inflation-adjusted purchase price: €100,000 × 2.64875 = €264,875

If the property was purchased before January 1, 1980, the value is based on the Land Registry valuation as of that date.

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Adding Additional Expenses

You can also deduct expenses incurred exclusively for increasing profit, such as:

Renovations that raise the property’s value
Legal fees
Real estate commissions
Transfer fees
Interest on loans related to the property

Expenses must also be inflation-adjusted, using the same method as the purchase price.

Example:

Renovations in January 1996 cost €20,000
Inflation Rate 1996: 148.32
Inflation Rate January 2026: 258.73
Adjustment number: 258.73 ÷ 148.32 = 1.7444
Inflation-adjusted expense: €20,000 × 1.7444 = €34,888

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Lifetime Allowances

Cyprus allows lifetime allowances, which reduce taxable profit. As of January 2026:

Allowance Type/ Amount

Sale of Primary Residence/ €150,000

Sale of Agricultural Land by a Farmer/ €50,000

Any Other Sale/ €30,000

Combined allowances cannot exceed €150,000 per individual
Each allowance can be claimed once in a lifetime

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Example Calculation

Suppose you sell a house in January 2026 for €500,000, purchased in January 1985 for €100,000, with renovations costing €20,000 in 1996. This is your primary residence and you haven’t claimed the allowance before.

Purchase Price Adjusted for Inflation = €264,875
Additional Expenses Adjusted for Inflation = €34,888
Lifetime Allowance = €150,000

Taxable Profit = €500,000 − (€264,875 + €34,888 + €150,000) = €50,237
Capital Gains Tax = €50,237 × 20% = €10,047.4

So, the CGT due is €10,047.4.

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Capital Gains Tax Exemptions

Some transfers are not subject to CGT:

Transfers by death (inheritances)
Gifts between close relatives (parents, children, spouses)
Foster parent to foster child gifts
Property exchanges of equal value
Land-for-apartment or land-for-development exchanges (with licensed developers, completed within 5 years)
Gifts to or from family-owned companies (with conditions)
Transfers to the Republic or approved charitable organisations
Agricultural land under the Agricultural Land (Consolidation) Laws
Property transfers during company reorganisations
Property settlements between divorced spouses
Shares listed on recognised stock exchanges

Key Takeaways

Tax rate: 20% flat on taxable profit
What’s taxed: Profit from selling immovable property in Cyprus or shares in property-owning companies (20%+ market value)
Inflation adjustment: Reduces taxable profit by accounting for changes in money value
Lifetime allowances: €150,000 (primary residence), €50,000 (agricultural land), €30,000 (other sales), claimable once in a lifetime
Exemptions: Include inheritances, close-relative gifts, and equal-value property exchanges

If you’re planning to sell property in Cyprus and want to minimise your Capital Gains Tax, contact us today for a free consultation. We can help you calculate your liability and explore legal ways to reduce it.