Tax & Structuring Guide for Foreign Buyers of Property in Cyprus

Tax & Structuring Guide for Foreign Buyers of Property in Cyprus

8 February 2026

Tax and structuring guide for foreign buyers of property in Cyprus, covering VAT rates, ownership structures, capital gains tax, rental income, and exit planning.

Luxury property acquisition is not only a lifestyle or investment decision — it is also a tax and structuring exercise.
For foreign buyers, the way a property is acquired, held, and eventually sold in Cyprus can materially affect tax exposure, compliance obligations, and long-term flexibility.

This guide focuses exclusivelyon the tax and structuring aspects of buying luxury property in Cyprus. It explains ownership options, VAT treatment, capital gains considerations, and common structuring mistakes — without overlapping with market or lifestyle guidance covered elsewhere.

Who This Guide Is For

This guide is relevant for:

  • Foreign buyers acquiring luxury residential property in Cyprus
  • Investors evaluating tax-efficient ownership structures
  • Buyers planning long-term holding, resale, or inheritance
  • Individuals combining property ownership with residency or relocation planning

It does not cover market selection (Limassol vs Paphos) or property lifestyle comparisons, which are addressed in our other guides.

For a broader strategic view covering investment logic, residency options, and relocation planning for international buyers, see our dedicated resource:

A Foreign Buyer’s Guide to Luxury Property in Cyprus: Investment, Residency & Relocation
https://luxury.cy/news/article/16/a-foreign-buyer%E2%80%99s-guide-to-luxury-property-in-cyprus:-investment,-residency-relocation

Personal Ownership vs Company Ownership

One of the first structuring decisions foreign buyers face is how the property should be held.

Personal Ownership (Individual Name)

Most foreign buyers acquire luxury property in Cyprus in their personal name, particularly for residential or lifestyle use.

Advantages

  • Simpler acquisition and compliance
  • Lower ongoing administrative costs
  • Straightforward resale process
  • Clear eligibility for reduced VAT (where applicable)

Considerations

  • Capital gains tax applies on resale
  • Estate planning should be considered separately
  • Rental income may be subject to income tax

For lifestyle buyers and long-term holders, personal ownership is often the most practical and cost-efficient option.

Company Ownership (Cyprus or Overseas Company)

Some buyers acquire luxury property through a company structure, usually for strategic or legacy reasons rather than simplicity.

Typical reasons

  • Asset consolidation
  • Succession or estate planning
  • Corporate occupancy or relocation
  • Portfolio structuring across jurisdictions

Key considerations

  • Corporate income tax may apply on rental or disposal profits
  • Ongoing accounting, audit, and compliance obligations
  • VAT treatment differs from personal ownership
  • Exit planning must be structured carefully

Company ownership should always be evaluated case by case with independent tax and legal advice before proceeding.

VAT on Luxury Property in Cyprus

VAT is one of the most significant cost variables for luxury property buyers.

VAT Rates

  • 19% VAT applies to new properties by default
  • 5% reduced VAT may apply to qualifying primary residences, subject to conditions

Important Points for Foreign Buyers

  • VAT eligibility depends on use, not nationality
  • Reduced VAT applies only to specific square metre limits
  • VAT treatment cannot easily be changed after signing
  • Incorrect structuring may permanently remove eligibility

VAT planning must be addressed before signing any reservation or sale agreement, not retrospectively.

Stamp Duty & Transfer Fees

Stamp Duty

Stamp duty is payable on the sale agreement and calculated on the contract value, subject to statutory thresholds.

Transfer Fees

  • Generally applicable on resale properties
  • Often reduced or exempt when VAT has been paid
  • Calculated by the Land Registry based on valuation

These costs are predictable but should be included in total acquisition budgeting from the outset.

Capital Gains Tax on Resale

Foreign buyers are subject to Cyprus Capital Gains Tax (CGT) on the disposal of Cyprus-situated property.

Key Features

  • Tax applies to the net gain, not the sale price
  • Acquisition costs and certain expenses are deductible
  • Indexation relief may apply for older properties
  • Primary residence exemptions may apply, subject to conditions

Exit strategy should be considered at acquisition stage, especially for high-value luxury assets.

Rental Income & Ongoing Tax Considerations

Luxury property owners who generate rental income should consider:

  • Income tax implications
  • Allowable expense deductions
  • Municipal and local authority charges
  • Reporting and compliance obligations

Tax treatment depends on:

  • Ownership structure
  • Frequency of rental activity
  • Tax residency status of the owner

Professional advice is recommended before offering a luxury property for rent.

Non-Dom & International Tax Positioning

Cyprus is widely used by high-net-worth individuals due to:

  • The non-dom tax regime
  • An extensive double tax treaty network
  • A predictable and transparent tax framework

While property ownership alone does not create tax residency, it often forms part of a broader international structuring strategy involving personal tax residence, corporate planning, and asset protection.

Common Structuring Mistakes Foreign Buyers Make

  • Choosing an ownership structure without considering resale
  • Assuming VAT treatment can be changed later
  • Using company ownership unnecessarily
  • Ignoring inheritance and succession planning
  • Failing to coordinate legal, tax, and property advice

Most issues arise from structural decisions made too late, not from the transaction itself.

How This Guide Fits Within Our Luxury Property Resources

This tax and structuring guide is designed to complement our other in-depth resources:

Together, these three guides form a complete framework for informed luxury property acquisition in Cyprus.

Luxury property buyers who address tax and structuring early protect not only capital, but long-term flexibility.

Cyprus offers a highly competitive and transparent environment for foreign buyers — but optimal outcomes depend on:

  • Correct ownership structure
  • Proper VAT treatment
  • Planned exit strategy
  • Coordinated professional advice

Early planning is not an expense. It is risk management.

Planning the Structure of a Luxury Property Purchase?

Foreign buyers benefit from early, coordinated guidance before committing to an ownership structure or signing any agreement.

Request a Confidential Structuring Discussion https://luxury.cy/contact-us

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