Capital gains tax in Cyprus is a deduction from the profits received from the sale of real estate. It must be paid even if you are selling your main residence rather than making a business transaction.
Capital gains tax in Cyprus: amounts and deductions
Property tax in Cyprus on sale is 20% of the net profit received by the seller. Net income is cash minus the following expenses:
- The cost price or market value of an immovable object on January 1, 1980
- If the object is purchased after this date, then all costs for its acquisition and improvement until the moment of sale are deducted, taking into account inflation. This includes repair work, electricity, water supply, purchase of furniture, technical equipment of housing, etc.
- Title fee.
- Payment for the services of licensed real estate agents who dealt with the purchase and sale of the object.
Sellers who have owned property for 5 years or more can reduce their Capital Gain Tax through incentives for:
- individuals when selling an apartment or a private house (main housing) – 85,430 €;
- farmers who sell agricultural land – 25,629 €.
- individuals when selling other property (household appliances, etc.) – 17,086 €;
When you do not need to pay property sales tax in Cyprus
Cases where capital gains tax is not charged:
- If real estate is exchanged, and the objects are equivalent in price. Or the profit received after such a transaction goes to the purchase of new housing.
- When donating real estate to relatives (up to the 3rd degree of kinship) or shareholders of a family company.
- When transferring real estate to a charitable organization.
Also, land that was purchased between July 16, 2015 and December 31, 2016 is not taxed. And property that is inherited as a result of the death of the owner.