Cyprus Homeowners Rental Taxes

What taxes apply to rental income in Cyprus?

Rental income in Cyprus is generally subject to:

• Income Tax
• General Healthcare System (GHS) contribution

From 1 January 2026, the Special Defence Contribution (SDC) on rental income is expected to be abolished for individuals under the proposed tax reform framework.

Is rental income taxable in Cyprus?

Yes. Rental income earned from property located in Cyprus is taxable for both:

• Cyprus tax residents
• non-resident property owners with Cyprus rental income

Tax is calculated on the net rental profit after allowable deductions and expenses.

What expenses can property owners deduct?

Typical deductible expenses may include:

• property management fees
• maintenance and repairs
• insurance
• loan interest (subject to conditions)
• communal expenses
• professional fees
• depreciation / capital allowances (where applicable)

Allowable deductions depend on the specific property structure and ownership arrangement.

What are the Cyprus income tax rates?

Personal income tax bands (proposed 2026 reform)

Rental income is added to other taxable income when calculating total personal income tax liability.

Is GHS payable on rental income?

Yes. Rental income is generally subject to:

• 2.65% GHS contribution

The contribution is calculated on gross rental income, subject to annual caps and applicable rules.

Is Special Defence Contribution (SDC) still payable?

Under the proposed Cyprus tax reform:

• SDC on rental income is expected to be abolished from 1 January 2026 for individuals.

Prior to the reform, Cyprus tax residents who are also Cyprus domiciled persons may have been subject to SDC on rental income. 

Do non-residents pay tax on Cyprus rental income?

Yes. Non-resident owners receiving rental income from Cyprus property may still be subject to:

• Cyprus income tax
• GHS contribution (depending on circumstances)

Double tax treaty relief may apply depending on the owner’s country of residence.

Are there taxes when selling a rental property?

Potential taxes may include:

• Capital Gains Tax (subject to exemptions and deductions)
• transfer fees
• stamp duty

Tax treatment depends on:

• ownership structure
• residency status
• acquisition date
• property type
• applicable exemptions

Is professional property management recommended?

Yes. Many international owners use professional property management services to assist with:

• tenant management
• rent collection
• maintenance
• tax coordination
• financial administration
• long-term property supervision

This is especially common for luxury rentals and investment properties in Limassol.