Capital Gains Tax in Cyprus – Overview for Individuals and Businesses
Capital Gains Tax in Cyprus – A 2025 Guide for Individuals and Businesses
Understanding how Capital Gains Tax (CGT) applies in Cyprus is essential for both individuals and companies dealing with property transactions. Whether you’re selling land, a home, or shares in a company that owns immovable property, Cyprus imposes CGT under specific conditions. This article explains the main rules, exemptions, and non-taxable scenarios to help you stay compliant and plan strategically.
What Is Capital Gains Tax in Cyprus?
Capital Gains Tax in Cyprus is levied on gains arising from the disposal of immovable property located in Cyprus, as well as gains from the disposal of shares in companies that directly or indirectly hold such immovable property. This applies regardless of whether the seller is a Cyprus tax resident or not.
The current CGT rate is 20%, and it is applied only to the net profit, not the full sale value. Net profit is calculated as the difference between the sale price and the original purchase price, adjusted for inflation, improvements, and other allowable expenses.
When Does CGT Apply?
You may be subject to CGT if you:
• Sell land, houses, apartments, or other immovable property located in Cyprus.
• Sell shares in a company that owns such property, provided at least 50% of its market value is derived from that immovable property.
• Dispose of property by way of exchange or as part of a transaction that is not considered a gift.
Note: CGT is imposed irrespective of the tax residency of the seller. However, double tax treaties may provide relief in certain international cases.
Lifetime CGT Exemptions for Individuals
Cyprus provides generous one-time exemptions for individuals who dispose of immovable property under certain conditions. These exemptions are lifetime allowances and apply only once per category:
• €85,430 for the disposal of a private residence, provided it has been used as the primary home for at least five years.
• €25,629 for the disposal of agricultural land by a farmer who is actively engaged in farming.
• €17,086 for the disposal of any other type of property.
These exemptions are not cumulative; the maximum a person may claim in total is capped at €85,430.
Non-Taxable Property Transfers
Cyprus law also provides for a number of capital gains tax exemptions in specific scenarios, many of which apply to non-commercial transactions. The following types of disposals are not subject to CGT, provided they meet legal conditions:
• Transfers due to inheritance (succession on death).
• Gifts between close family members, including spouses, parents, children, and relatives up to the third degree of kinship.
• Gifts to companies where all shareholders are family members of the donor, and this status is maintained for at least five years after the gift.
• Gifts from family-owned companies to shareholders, if the property was originally acquired as a gift.
• Gifts to charitable institutions, to the Republic of Cyprus, or to registered political parties.
• Property exchanges, provided that any gain is used to acquire another immovable property. In such cases, CGT is deferred and applied when the new property is sold.
• Expropriations or compulsory purchases of property by the state.
• Transfers within company reorganisations, such as mergers or demergers, under approved schemes.
• Transfers of property from the estate of a missing person.
• Transfers between former spouses following a court decision to dissolve the marriage.
• Transfers due to loan restructurings, often conducted under official government relief programs or private bank agreements.
Each of these exemptions is subject to specific documentation and conditions. It is strongly recommended to consult with a licensed accountant or tax advisor to ensure eligibility and compliance.
Planning Ahead and Staying Compliant
For both residents and non-residents, planning property disposals in Cyprus can offer meaningful tax advantages if approached correctly. Applying the correct exemptions, maintaining accurate records, and consulting with a professional early in the transaction process can help reduce or eliminate CGT exposure.
At our accounting firm, we offer end-to-end support for:
• Capital Gains Tax calculations and filings.
• Documentation and reporting of exemptions.
• Advice on structuring property disposals tax-efficiently.
• Handling company reorganisations and intra-family transfers.
Contact Us for Capital Gains Tax Advisory in Cyprus
If you are planning to sell property or shares related to immovable property in Cyprus, let our experienced tax advisors guide you through the capital gains process. We help individuals, investors, and companies navigate CGT regulations, apply eligible exemptions, and file all required documents accurately and on time.
Get in touch today to schedule a consultation and secure your tax position before completing a property transaction.
📍 Based in Limassol | Serving all of Cyprus
🌐 Website: www.cctaccountants.com
