What is taxed: only property in Cyprus
Cyprus does not tax capital gains generally. There is no tax on listed share gains, none on selling a business, none on fund units. What is taxed is a narrow case:
- immovable property situated in Cyprus,
- shares in companies whose value derives from such property.
The rate is 20 % of the gain, meaning the proceeds less the acquisition cost and documented expenses.
Sell shares in a Cyprus company that runs a software product and no capital gains tax arises. Sell shares in a company that holds an office building in Limassol and it does.
Exemptions: three amounts, all raised in 2026
This is the actual change, and this is where almost every overview still carries the old figures.
| Case | Until 2025 | From 2026 |
|---|---|---|
| General, any property | €17,086 | €30,000 |
| Main residence | €85,430 | €150,000 |
| Agricultural land | €25,629 | €50,000 |
The change came through law 242(I)/2025, passed by the House of Representatives on 22 December 2025 and published in the Official Gazette on 31 December 2025, in force since 1 January 2026.
The difference matters in ordinary cases. On a €140,000 gain from selling an owner-occupied flat, the old position left €54,570 chargeable, so €10,914 of tax. Under the new position the gain sits entirely within the exemption and no capital gains tax arises.
Share disposals: threshold lowered from 50 to 20 percent
The second change is quieter and aimed at structures.
Up to and including 2025 a share disposal was chargeable only where more than 50 % of the value of the shares derived from Cyprus immovable property. That was a line you could build around.
Since 2026 20 % is enough, and it expressly counts indirectly, through subsidiaries. Anyone holding a chain of companies whose property share sat just under the old half should recalculate.
Deductions: what reduces the chargeable gain
The reform removed none of the deductions. Still deductible from the proceeds:
- the acquisition cost,
- documented improvements to the property,
- legal fees, transfer fees and estate agent commission,
- an inflation adjustment to the acquisition cost.
The word that carries the weight is “documented”. Two decades often sit between buying and selling a property, and the 2011 invoice for the new roof membrane is the reason the chargeable gain comes out lower. Lose it and you lose the deduction, not the tax.
What we could not confirm
Two points we are leaving open rather than smoothing over, because we could not trace them in the statutory text:
- The conditions attached to the €150,000 exemption. Several advisory sites list three: at least five years of own use, a plot of no more than 1,500 m², and a sale within a year of moving out. We could not find those three conditions in that form in the consolidated law. They may well be right; we simply are not presenting them as established.
- The scope of the reform package. Parliament passed five of six bills on 22 December 2025. We found no source naming which of the six did not go through.
If you are planning a disposal and one of these decides the matter for you, it is a question for someone who puts their name under the answer: Cyprus setup from one place.
Bookkeeping: records have to outlive the sale
Capital gains tax is not a recurring tax. It falls due once, and it falls due on the strength of documents that had to survive until that day.
In receipt capture, invoices sit against the property and not only in the month they were paid. Reports show the accumulated acquisition costs per property, and tax estimates keep the rates in one place, so a change in the law is a setting rather than a search through old spreadsheets.
How the rest of the reform fits together is in the guide to the 2026 tax reform; the new corporate rate is in the guide to corporate tax.