On 22 December 2025, the Cyprus Parliament approved six amendments to existing tax laws.
The changes are effective as of 1 January 2026.
Key updates related to property transactions laws are summarised below.
INCOME TAX LAW
- CIT rate: The corporate income tax (CIT) rate is increased from 12,5% to 15%;
- 60 days tax residency: The condition for an individual not to be tax resident in another state for him/her to be Cyprus tax resident, is removed;
- Income Tax bands: The tax-free band for individuals is raised from €19.500 to €22.000;
- New income tax deductions for individuals: Subject to Income level, for individuals who incur costs in relation to:
- dependent children / university students;
- interest on loans used for acquisition of main residence or rent for main residence;
- insurance payment against natural disasters on residence,
- expenses for energy efficiency;
- acquisition of electric car.
- Crypto taxation: Introduction of provisions for the taxation of crypto currencies at a flat rate of 8%.
STAMP DUTY LAW
Abolished.
SPECIAL CONTRIBUTIONS FOR THE DEFENCE (SDC) TAX LAW
- Reduction of SDC rate applicable on dividends earned by Cyprus tax residents Cyprus domiciled individuals % from 17% to 5%;
- Payment on SDC on rental income is abolished;
- In case of bonus issue of shares, the amount capitalized will be treated a dividend;
- Provisions have been introduced for the taxation of deemed dividends at the rate of 10%. The deemed dividend is calculated by adding:
- The market value of an assets owned by a company used by a shareholder for private use;
- The difference between the market value of an asset transferred by a company to its shareholder and the consideration amount paid for the said transfer;
- The exemption from SDC for Cyprus tax resident non domiciled individuals may be extended beyond the 17 years with the payment of a lump sum of €250.000 per period for additional two periods of 5 years each.
CAPITAL GAINS TAX LAW
- The definition of shares that directly or indirectly own immovable property has been amended to include shares which derive 20% (as opposed to 50% previously required) of their value from immovable property situated in Cyprus;
- The tax-exempt amounts for disposal of immovable property, agricultural land and main residence have been increased;
- Building/plots in exchange for land has been included in the exemptions from capital gains tax;
- Penalties & fines have been significantly increased.
COLLECTION OF TAXES LAW
- Powers given to the Commissioner of Taxation to pledge shares owned by a taxpayer who owes taxes exceeding €100.000.
ASSESSMENT AND COLLECTION OF TAXES LAW
- All tax resident individuals from the age of 25 to the age of 71 have an obligation to file a personal income tax return irrespective of whether they have income or not while all Cyprus tax resident individuals who have income will have an obligation to file a return irrespective of their age;
- Partnerships will have an obligation to submit tax returns;
- The threshold for annual income for individuals to have an obligation to prepare audited accounts is increased from €70.000 to €120.000;
- Rent can only be paid through bank transfer, credit card or any other mean of electronic payment but not with cash;
- A director will continue to be liable for actions or omissions that have taken place during his/her term despite that at the time proceedings will commence he/she has already resigned.
