31st March, 2026
If you own property in Cyprus, you no longer pay annual immovable property tax to the government. It was abolished in 2017.
But it doesn’t mean property ownership is tax-free. You still pay a few other charges, and this is where confusion usually comes in. Read on to understand what you actually pay to own property in Cyprus.
The old Immovable Property Tax (IPT) used to be a yearly charge based on the value of your property. The government scrapped it to simplify things and reduce the burden on owners.
Instead, the costs shifted more toward local charges and transaction-based taxes.
In practical terms, this means:
Although the government removed the immovable property tax, you still pay the regular expenses that come with owning property.
Cyprus properties used to be assessed under older valuation systems. Some dates went back to January 1980, before later updates.
While that system has evolved, traces of these valuations still influence how authorities calculate some local charges today.
This is where most people trip up. They assume “no immovable property tax” means zero yearly costs. This isn’t accurate. If you own property in Cyprus, you will still pay the following:
These are paid to your local council. These are relatively small but vary depending on where your property is situated. The amount is often based on the 2013 valuation of the property.
If your property is connected to a sewage system, there’s an annual charge. Again, this depends on the local authority.
Some areas include this within municipal tax, whilst others bill it separately. For example, the Aglandja district in Nicosia uses a “pay as you throw” system with special bin bags.
None of these is usually a large amount to pay on its own. But together, they form your annual “holding cost” for the property. For most property owners, this replaces what used to be a single annual property tax.
Even though there’s no yearly immovable property tax, Cyprus still taxes real estate transactions.
When buying:
Some new builds are subject to VAT, although a reduced VAT or reduced rate may apply if the property will be your primary residence. This depends on the type of property and how it will be used.
These aren’t recurring costs, but they matter more than the old annual tax ever did for most buyers.
If your property generates income in Cyprus, that brings in another layer of tax.
For example, rental income is taxed under personal income tax rules. The amount you pay depends on your total income in Cyprus and the applicable tax bands.
If you own property through a company, any profits may fall under corporate income tax instead. The structure you choose can affect how much tax you pay overall, so it’s something many investors look at early on.
Even without IPT, property value hasn’t become irrelevant.
Local taxes often rely on older valuations (commonly 2013 figures). That can feel odd if your property’s market value has changed a lot since then.
If you’re trying to budget, the key thing is to think in terms of ongoing local costs plus one-off transaction taxes.
A typical owner might deal with:
If you’re buying real estate in Cyprus, this is often seen as a plus. Just don’t ignore the smaller recurring fees as they still add up over time, even if they’re not labelled as “immovable property tax”.
At DNP Property Group, we have over 30 years of experience in dealing with property investment in Cyprus. We work with individuals looking to expand their property portfolio with expert guidance and support, and developments that can yield good returns.
Contact our team today to see how we can help you.