What is GHS tax in Cyprus?

The General Healthcare System (GHS) is a 2.65% tax on gross rental income in Cyprus, payable twice yearly on June 30 and December 31 by all property owners, including non-residents.

Do Israeli property owners need to file Cyprus tax returns?

Yes, if your Cyprus rental income exceeds €19,500 annually, you must file a Cyprus tax return (TD1 form), regardless of your residency status.

What are the Cyprus income tax rates for rental properties?

Cyprus income tax rates are progressive: 0% up to €19,500, 20% on €19,501-€28,000, 25% on €28,001-€36,300, 30% on €36,301-€60,000, and 35% above €60,000.

When are Cyprus tax deadlines?

GHS payments are due June 30 and December 31 for semi-annual periods. Annual income tax returns (TD1) are due by September 30 for the previous tax year.

What happens if I miss a Cyprus tax deadline?

Late payment results in a 5% penalty surcharge plus annual interest of approximately 2-3%. Persistent non-payment can lead to legal action and complications when selling property.

How much does KMB charge for Cyprus tax services?

Tax form preparation starts at €150, GHS tax management is included with tax preparation, and ongoing compliance support is €299 per year. All pricing is transparent with no hidden fees.

Do I need to be in Cyprus to use KMB services?

No, KMB provides 100% remote service. We work entirely online with Israeli property owners, handling all Cyprus tax obligations without requiring you to visit Cyprus.

What is the Special Defence Contribution (SDC)?

The SDC is a 3% tax on rental income that normally applies only to Cyprus residents after a 25% deduction. Most Israeli property owners are exempt from SDC unless they are Cyprus tax residents.

Cyprus Tax Reform 2026: Everything You Need to Know

Overview

The Cypriot cabinet has approved the most significant tax reform in 22 years, targeted to take effect on 1 January 2026 (subject to parliament approval). Below we summarise what matters most for individuals, companies and property investors.

1. Good News for Individuals: Higher Tax-Free Threshold

Today: The annual personal income tax (PIT) exemption is €19,500.

From 2026: The exemption rises to €20,500.

Bottom line: An extra €1,000 of income becomes tax-free - more net pay left in your pocket each month. This is designed to ease pressure on the middle class and increase disposable income.

2. Strategic Shift for Companies: Corporate Tax to 15 %

Today: Cyprus has long offered an attractive 12.5 % corporate tax rate.

From 2026: Corporate income tax increases to 15 %.

Bottom line: This aligns Cyprus with the OECD BEPS 2.0 global minimum tax. Even at 15 %, Cyprus remains one of Europe’s most attractive jurisdictions (compare Israel’s 23 %), reinforcing Cyprus’s position as a modern, compliant economy rather than a "tax haven".

3. Big Change for Property Investors: SDC on Rent Abolished

Today: In addition to normal PIT, Cyprus tax residents who are domiciled paid a 3 % Special Defence Contribution (SDC) on 75 % of their rental income.

From 2026: The SDC on rental income is abolished entirely.

Bottom line: No more double layer on rent. This simplifies calculations and directly increases net rental yields, providing a strong boost to the local real-estate investment market.

Important Clarification: GHS Is Unchanged

Many confuse PIT, SDC and GHS. The reform does not change GHS payments.

Personal Income Tax (PIT): Applied to active income (salary, business profits). The threshold rises to €20,500.
SDC: Applied to passive income (dividends, interest, rent). SDC on rent is abolished.
GHS (General Healthcare System): A separate health contribution funding Cyprus’ public healthcare. Still payable as before.

What Should You Do Now?

The 2026 reform changes the rules of the game: higher personal exemption, removal of SDC on rent, and a 15 % corporate tax rate. To position yourself correctly, you need guidance that understands both Cyprus law and the Israeli perspective.

How KMB Helps

Tailored tax strategy for 2026
Company structuring and compliance
Property investment planning without SDC on rent

We closely track all developments and build the right plan for you - don’t wait for the last minute.