Tax Tips for Cyprus Company Owners - How to decrease taxes on property transactions


  • Acquisition of Primary Residence

Reduced VAT rates apply on the acquisition and/or construction of residences for use as the primary and permanent place of residence. Such conditions vary each year so it is better to consult with us before signing up the property purchase agreement.

  • Repairs
  • New Residences

Renovation and repair of private residences is carried at the reduced rate of VAT of 5%

  • Old Residences

The reduced rate of 5% applies for renovation and repair of old private residences subject to the following conditions:

  • a period of at least three years has elapsed from the date of the first use of the residence
  • residence is used as the place of residence of vulnerable groups, or
  • residence is in remote areas
  • Transfer Fees

Are currently reduced by 50% until further notice by the government.

Do not apply if the transaction is subject to VAT

Transfer fees tax brackets:

  • from parents to children – Nil
  • between spouses – 0,1%
  • between third degree relatives – 0,1%
  • to trustees €50
  • VAT 

VAT does not apply on resales whilst a 19% VAT is charged on new properties.


Rental Income 

a) Immovable Properties - Owned by a Company

Rental Income: Subject to Special Defence Tax at 30% on the 70% of rental income (2.25% x total rental income)

Company Profits: Subject to Corporation tax at 12.5% + Deemed Dividend Tax, if shareholders Cyprus tax residents and domiciled (does not apply for Cyprus tax residents who are not domiciled)

b) Immovable Properties - Owned by an Individual

Rental Income: Subject to Special Defense Tax at 30% on the 70% of rental income (2.25% x total rental income) + Applicable NHS

Profits: Added to the tax payers tax return and subject to income tax at appropriate thresholds. See table with applicable tax rates here.

c) Immovable properties classified as historic (diatiritea)

Short lets (via, airbnb etc) - are taxed normally as above

Long stays (rental agreement is available) are subject only to Special Defence Tax and NHS (NHS applies only if the owner of diatiriteo property is an individual and not a company).