Buying and Selling Property in Cyprus in 2026: A Legal and Tax Guide for Investors and Owners

Property transactions in Cyprus have changed in several ways during 2026. Stamp duty has been abolished, the capital gains tax rules have been adjusted, and new VAT criteria for buildings took effect on 1 September 2026. At the same time, the core legal risks have not moved: the quality of title, the planning status of the building and the protection of the buyer's contract. This guide sets out the sequence of a Cyprus property transaction from both sides, with the costs and tax points as they stand in October 2026. It covers residential, commercial and industrial property.

1. Start with title and planning

Whether buying or selling, the first step is the same: establish what is actually being transferred.

For buyers, a search at the Department of Lands and Surveys should confirm the owner, any mortgages, charges or caveats, and that boundaries match the title. Where the property is part of a development without separate title deeds, the developer's title to the land and any bank financing secured on it must be checked, as the "trapped buyers" cases show. We discuss the current position in our article on the trapped buyers legislative fix. Planning and building permits must also be verified. Unauthorised works are common, and they can delay transfer, block financing or lead to price renegotiation.

For sellers, the same review before listing avoids delays later. Mortgage consent and discharge arrangements should be agreed with the lender in advance, permit deviations dealt with or priced and disclosed, and the VAT position established. A seller who knows of a defect or encumbrance and does not disclose it risks claims for misrepresentation and, in serious cases, rescission.

2. The sale and purchase contract

The contract is the foundation of the transaction. It should identify the property by plot, sheet plan and district, state the price and payment schedule, and set out conditions precedent (for example, financing or approvals) with deadlines and consequences. It should contain a warranty of good title, disclose known encumbrances and say how they will be dealt with at completion, and specify who pays which costs. Remedies for breach, including deposit retention and specific performance, should be clear.

Sellers should pay attention to the deposit clause: the amount, when it is refundable and when it may be kept. Buyers should insist on vacant possession where relevant, and on an agreed list of fixtures and excluded items.

Deposit the contract. Under the Sale of Immovable Property (Specific Performance) Law 81(I)/2011, a contract deposited at the Land Registry gives the buyer priority over later dealings by the seller and the right to enforce transfer through the courts. The contract should be deposited within the statutory period, which has been two months (60 days) from signing, and the current requirement should be confirmed at the time of signing. A missed deposit does not void the contract, but it removes the buyer's main protection until the title deed is issued.

3. Foreign buyers and the Council of Ministers

EU nationals can acquire property in Cyprus without restriction. Non-EU nationals generally require a permit under the Immovable Property Acquisition by Aliens Law (Cap. 109), granted through the Council of Ministers and, in practice, processed by the District Administration. The standard allowance is one residential property or a plot of limited size, and practice has allowed a second property in some cases. A replacement for Cap. 109 has been under parliamentary consideration, so the current rules should be checked at the time of purchase. Acquisition through a Cyprus company has its own considerations, including the effect of foreign ownership of the company.

4. Taxes and costs in 2026

The table below summarises the main costs for a buyer and the main tax for a seller. Figures should be confirmed against the legislation at the date of the transaction.

Item	Position in 2026
Stamp duty on the contract	Abolished from 1 January 2026 (Law 239(I)/2025). Contracts signed on or before 31 December 2025 remain under the old regime and should have been stamped.
Transfer fees	Charged on the Land Registry's assessed value: 3% up to EUR 85,000, 5% from EUR 85,000 to EUR 170,000, 8% above. A 50% reduction applies to transactions not subject to VAT. No transfer fee is charged where VAT applies.
VAT on new buildings	19%, or a reduced 5% on the first 130 sq m and EUR 350,000 for a buyer's main permanent residence, subject to overall caps (190 sq m, EUR 475,000) and undertakings. The criteria for what is "new" changed on 1 September 2026 (see below).
Capital gains tax (seller)	20% on gains from immovable property in Cyprus and on shares in "property-rich" companies. The 2026 reform reduced the property-rich threshold to 20% of value from Cyprus real estate and raised the lifetime exemptions, including for a primary residence.
Legal and registration costs	Typically around 1% plus VAT for legal fees, and Land Registry charges.
Annual property tax	None. Municipal and sewerage charges apply.

5. VAT: the new "first occupation" test

The VAT position on buildings changed on 1 September 2026. The earlier five-year rule has been replaced by a test based on first occupation: a supply of a building is subject to VAT if it takes place before the building has been used systematically for at least 18 months. A building left empty can therefore remain "new" for VAT purposes indefinitely, and use by any person counts towards the 18 months. A sale before that point is taxable at 19% unless the reduced rate conditions are met, and no transfer fee is then payable. We explain the change in our article on VAT on new and renovated buildings. Sellers who are developers or who otherwise act as taxable persons should review unsold stock, and buyers should ask for evidence of occupation.

6. Residential, commercial and industrial property

Residential. The main markets are Limassol, Paphos, Larnaca and Nicosia, with different buyer profiles in each. Beyond title and permits, buyers who intend to let should review the Cyprus tenancy rules, which give tenants statutory protection in some cases. Buyers wishing to rely on residence by investment should take immigration advice separately, as the qualifying conditions are set outside the property law.

Commercial. Limassol is the principal business market. Zoning and permitted use must be confirmed before acquisition, and a change of use may require approval. Lease terms matter: rent and review, term and break options, repair obligations, assignment and subletting. We set out the full checklist in our article on commercial real estate due diligence.

Industrial. Logistics and warehousing demand centres on the ports and the main roads. Access, utility capacity and environmental permits are the main issues. Manufacturing or processing may require environmental permits and, in some cases, impact assessments under EU-derived rules.

7. Holding property through a company

Investors often hold property through a Cyprus company for estate planning, liability separation, financing or co-investment reasons. The company can sell the property itself or its shares can be sold, which affects transfer fees, VAT and capital gains tax. Share sales avoid transfer fees on the property but pass historic liabilities to the buyer and require corporate due diligence. Since the 2026 reform, the 20% property-rich threshold makes a share sale taxable more often than before. The choice should be modelled before the sale is agreed. For the corporate side of a share purchase, see our article on buying a Cyprus company.

8. A sensible sequence

1. Instruct a lawyer before agreeing heads of terms, not after.

2. Complete title, planning and encumbrance searches.

3. Settle the VAT or transfer fee position and model the total cost.

4. Negotiate and sign the contract with the protections above.

5. Deposit the contract at the Land Registry within the statutory period.

6. Complete, pay taxes and fees, and register the transfer.

Conclusion

The removal of stamp duty makes the contract stage cheaper, and the new VAT test makes the age of a building matter less than its history of use. The foundations are unchanged: check title and permits, protect the contract by depositing it, and understand the tax position on both sides before agreeing a price. For anything beyond a straightforward residential purchase, a transaction-specific review is worth the cost.

This article is provided for general informational purposes only and does not constitute legal or tax advice. Specific legal advice should be sought before taking any action in reliance on the contents of this article.