Buying in Cyprus · 8 min read
Cyprus property purchase costs and taxes
What you actually pay on top of the headline price, when each amount falls due, and where the 5% reduced VAT rate applies.
Last updated 1 August 2026
VAT: 19% or 5%
New-build residential property is subject to VAT. The standard rate is 19%, but a qualifying primary residence attracts 5% on the first 130 m² of buildable internal area, subject to the value thresholds set out in the current legislation.
The reduced rate applies to a home you will occupy as your main residence, not to a holiday home or a buy-to-let. It is claimed through an application to the Tax Department before delivery, and is clawed back if you dispose of the property or stop using it as your main residence inside the qualifying period.
Stamp duty
Stamp duty is charged on the contract value: nil on the first €5,000, 0.15% up to €170,000, and 0.20% above that, capped at €20,000 per contract. It is payable within 30 days of signing, and late payment attracts a penalty.
Transfer fees
Land Registry transfer fees run on a scale from 3% to 8% of assessed value. Critically, where VAT has been charged on the purchase — which is the case for essentially all new builds — transfer fees are not payable. Buyers of resale property that did not carry VAT do pay them, with a 50% reduction available in defined cases.
Worked example: a €550,000 new-build apartment
Assume a primary residence qualifying for reduced VAT on the first 130 m² and standard VAT above that. Figures are indicative and rounded.
- Purchase price before VAT — €550,000
- VAT at the blended rate — approximately €33,000 (varies with the internal area split)
- Stamp duty — approximately €1,010
- Legal fees at 1% plus VAT — approximately €6,545
- Land Registry lodging and searches — approximately €400
- Transfer fees — nil, because VAT was charged
- Indicative total on top of price — approximately €41,000
Annual running costs
Cyprus has no annual immovable property tax at national level. The recurring costs are local and modest.
- Municipal or community tax — typically €100–€400 a year depending on value and district.
- Sewerage board charge — a small percentage of assessed value.
- Refuse collection — a fixed annual municipal charge.
- Service charge on a managed development — funds shared landscaping, pool, lighting and insurance.
- Buildings insurance — required by any lender and sensible in all cases.
On sale: capital gains
Capital gains tax is charged at 20% on the gain from immovable property in Cyprus, after indexation and available lifetime allowances. Allowances include a general exemption and a larger exemption on the disposal of a main residence, subject to conditions.
Because allowances are lifetime rather than annual, sequencing disposals matters. Take specific advice before selling more than one property.
Frequently asked
- Is VAT payable on resale property in Cyprus?
- No. VAT applies to the first sale of a new build. Subsequent resales are outside VAT, which is why transfer fees become payable on those transactions instead.
- Can I recover the 5% VAT rate after completion?
- The reduced rate must be applied for and approved before delivery of the property. Retrospective claims are not generally available, so the application must be part of the purchase timetable.
- Are there annual property taxes in Cyprus?
- There is no national annual property tax. Owners pay municipal tax, a sewerage charge and refuse collection, which together are usually a few hundred euros a year.
This guide is general information, not legal, tax or financial advice. Rules and rates change — take advice specific to your circumstances before you commit.
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