Planning a budget for purchasing real estate in Cyprus in 2026 requires taking into account updated legislation, which has significantly simplified the transaction structure. The main change of the year was the complete abolition of stamp duty, which reduced the administrative burden on buyers. However, the total amount of additional costs remains between 5% and 10% of the property price. The main burden is now distributed between VAT (for new builds), title transfer tax (for the secondary market), and professional fees. A clear understanding of each cost item is necessary for accurately calculating the final investment amount.
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Stamp Duty abolished from 1 January 2026
As of the beginning of 2026, the Stamp Duty Law officially ceased to be effective in Cyprus. All sales contracts signed from January 1, 2026, no longer require the payment of the progressive tax (previously up to 0.2%) or the affixing of physical stamps on the documents. This innovation not only saves investors money but also significantly speeds up the process of depositing contracts with the Land Registry, eliminating an unnecessary bureaucratic step. It is worth noting that for transactions concluded up to and including December 31, 2025, the obligation to pay the tax remains.
Value Added Tax (VAT) and new 5% limits
When purchasing a new property, the main tax remains VAT. The standard rate is 19%, but first-time home buyers are eligible for a reduced rate of 5%. Strict eligibility criteria for this reduced rate will apply from 2026:
- The preferential rate of 5% applies only to the first 130 m2 of living space.
- The total area of the facility must not exceed 190 m2
- The maximum property value for which the benefit applies is limited to €475,000.
If the property exceeds the specified limits in area or price, the standard rate of 19% is charged on the difference. No VAT is charged on the purchase of commercial real estate or resale housing.
Transfer Fees
This tax is paid at the Land Registry Office when the title deed is transferred to the buyer’s name. An important rule remains in place in 2026: if the transaction was subject to VAT, the buyer is completely exempt from paying the Transfer Fee ( at a 0% rate ). For secondary market properties where VAT was not paid, the tax is calculated on a progressive scale, with a 50% discount on the accrued amount.
| Market value of the property | Tax rate (before discount) |
| The first €85,000 | 3% |
| From €85,001 to €170,000 | 5% |
| Over €170,000 | 8% |
Example: When purchasing a used car for €200,000, the final tax, taking into account the 50% discount, will be approximately €4,575.
Legal support and due diligence
In 2026, the services of an independent lawyer remain critical to verifying title deeds and ensuring there are no encumbrances. The legal fee typically amounts to 1% of the transaction price plus VAT (19%). This fee includes checking building permits, drafting the contract, submitting documents to the Land Registry, and representing the buyer before tax authorities to obtain VAT exemptions. Using standard contract templates without a lawyer is considered a high risk to capital in today’s Cyprus.
Bank fees and mortgage costs
If bank financing is used for the purchase, the investor incurs additional costs for the loan application. The bank’s mortgage processing fee averages 1% of the loan amount. An independent property valuation is a mandatory step, costing between €300 and €800 in 2026. The bank will also require property and borrower life insurance. Total mortgage costs at closing can amount to approximately €1,500–€3,000 on top of the principal payments.
Connection of communications and municipal fees
Renewing electricity and water accounts requires the payment of refundable security deposits. For foreign citizens, these amounts in 2026 are approximately €200–€350 for electricity and €150–€200 for water. Municipal waste and sewerage fees are also included, and are paid proportionally to the length of ownership of the property in the current year. When purchasing in gated communities, an advance payment for community fees (Communal Fees) for several months may be required.
Furniture and technical equipment
Since most new builds are delivered unfurnished, home furnishing costs account for a significant portion of the budget. It’s important to remember that the purchase of furniture, appliances, and decorative items is subject to the full 19% VAT rate, even if the apartment itself qualifies for a 5% VAT exemption. In 2026, high-quality turnkey furnishing of a one-bedroom apartment costs an average of €15,000–€25,000. These costs must be factored in in advance, as they are not included in the mortgage loan amount and must be covered by the buyer’s own funds.
