Buying property in Cyprus: the rules, the costs and the VAT trap

Cyprus starts from a permission. Under Cap. 109 a foreigner may not acquire immovable property without the prior permission of the Council of Ministers, and a registration made without it is void. Nationals of the EU and the EEA are not foreigners for this purpose, and neither is a company established in the EU or the EEA — but a Cypriot company controlled by foreigners is.

The application is form COMM 145, filed with the District Officer of the district where the property lies, with the site plan, the title, the building permit, the sale contract, evidence of means and copies of passports. The permission is a condition of the title, not of the contract: a buyer may sign and deposit the contract before it is granted, and the contract gives no right to the title until it is.

A plot larger than two skales, about 2,676 m², brings further conditions. The often repeated rule of one home per foreign buyer is not in the Act; it is how permits are granted in practice. A lease longer than 33 years counts as an acquisition.

Tighter rules are under discussion. In September 2026 the government described a draft that would bar purchases near the ceasefire line and critical infrastructure and limit the size of plots and homes, and four bills are before parliament. None has been adopted.

On a new home VAT replaces almost everything else. The standard rate is 19%. The reduced 5% rate is for a home used as the buyer's main and permanent residence in Cyprus: it covers the first 130 m² of buildable area and value up to €350,000, and only where the whole transaction is no more than €475,000 and the home no larger than 190 m². The buyer declares that they hold no other such home in Cyprus. If they stop living there within ten years, they must tell the tax department within 30 days and pay the difference for the years remaining. A buyer who goes on living abroad pays 19%.

Where VAT is charged, no transfer fee is due — unless the Land Registry considers the declared price below market value, in which case it may charge the fee on the difference. A resale carries no VAT and does carry the fee: 3% up to €85,000, 5% to €170,000 and 8% above, halved by law to 1.5%, 2.5% and 4% in effect. On a €300,000 resale that is €8,600.

Stamp duty no longer exists: it was repealed from 1 January 2026, and guides still quoting 0.15–0.2% describe the old law. A lawyer's fee is set by no tariff; about 1% of the price is market practice.

The sale contract is the step that protects the buyer. Under Law 81(I)/2011 it must be deposited at the district Land Registry office within six months of signature, and it is accepted only if the seller is the registered owner and the contract is in writing and signed by both sides. A deposited contract makes the purchase enforceable before a title deed exists — which, for a home bought off-plan, is the normal situation for a long time.

A buyer from outside the EU files COMM 145 alongside; the permission is needed before the title is registered in the buyer's name, not before signing.

For the permanent residence route the contract must already be deposited, or the title issued, when the residence application goes in, and at least €300,000 excluding VAT must have been paid.

Cyprus charges no annual property tax: it was abolished from 1 January 2017. What remains is local — municipal and sewerage charges and the building's common charges, set by each authority and each building.

Rental income is taxed together with the owner's other income on the 2026 scale: nothing up to €22,000, then 20%, 25% and 30%, and 35% above €72,000. Since 2026 rent no longer carries the Special Defence Contribution that used to be due on top. Whether an owner is taxed as a resident depends on days spent in Cyprus, not on holding a residence permit.

On a sale, capital gains tax is 20%. For a home the owner has lived in for at least five years, €150,000 of the gain is exempt — raised from €85,430 in 2026.

A house or flat may be let to holidaymakers only once it is entered in the Deputy Ministry of Tourism's register of self-catering accommodation, and only while that registration is in force and renewed. The property has to meet the specifications the law sets for a single house, villa or apartment.

Letting without it is a criminal offence: up to a year in prison or a fine of up to €5,000, or both, and up to €200 for each day it continues after conviction.

A home bought at the 5% VAT rate has to remain the owner's place of residence for ten years. If it stops being that — a holiday let is not where the owner lives — the difference to 19% is due for the years remaining.

A new home from a developer is the main way to Cyprus's permanent residence under regulation 6(2): €300,000 plus VAT, first sale, up to two units, paid with money from abroad and not with a Cypriot loan. At least €300,000 excluding VAT must be paid by the application, whatever the delivery date, so an off-plan purchase works once that much is in.

The property is a condition, not a step: it has to be kept. Selling it without replacing it at the same value or more cancels the permit for the whole family, and the holder proves every year that it is still owned.

VAT decides the real price of the route. The permit does not require living in Cyprus, so the reduced rate usually does not apply, and the purchase costs €357,000 at the threshold rather than €315,000.

A resale home does not qualify under the home category. A resale shop, office or hotel unit does, under the separate category for other property, at the same €300,000.