Overview
Owning property in Cyprus can be tax-efficient, but you still face several taxes after the Immovable Property Tax (IPT) was abolished in 2017.
1. Income Tax on Rental Income
- 0 % on rents up to €19,500
- 20 % on €19,501–€28,000
- 25 % on €28,001–€36,300
- 30 % on €36,301–€60,000
- 35 % on amounts above €60,000
2. General Healthcare System (GHS) Levy
All landlords—residents and non-residents alike—pay 2.65 % of gross rent every six months (30 June and 31 December).
3. Special Defence Contribution (SDC)
The 3 % SDC normally applies only to Cyprus-resident landlords (after a 25 % deduction), so most Israeli investors are exempt.
4. Capital Gains Tax on Sale
Cyprus levies a flat 20 % tax on the gain when you sell. The first €17,086 is exempt, and additional reliefs may apply to main homes.
5. Municipal Levies & Transfer Fees
Budget roughly €85–€300 per year for refuse/sewerage charges and 0–8 % Land-Registry transfer fees if you sell.
Essential Compliance Steps
Income Reporting: If your total Cyprus income exceeds €19,500, professional tax filing is required.
Timely Payments: Pay GHS (and SDC if applicable) on time—late payment triggers a 5% surcharge plus interest.
Documentation: Keep all tax certificates and receipts when tenants withhold tax at source.
Expert Guidance: Work with KMB specialists who understand the Israel–Cyprus double-tax treaty.