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Cyprus Real Estate Sector Overview
The real estate sector is among the leading contributors to Cyprus's GDP.
Cyprus has established itself as a leading real estate investment destination, combining a favourable tax framework, a strategic Mediterranean location, and a strong economic environment.
The real estate and construction industry remains a pillar of the nation’s economy, demonstrating remarkable resilience and growth potential. The market's strength is a clear signal to investors of the sustained value and opportunity available.
Transaction values have reached significant heights, demonstrating sustained market strength. For overseas investors and international companies, Cyprus offers compelling advantages, including EU membership with regulatory transparency, a highly business-oriented environment and a stable political environment aligned with common law.
At RSM Cyprus, we deliver assurance, tax and consulting services designed specifically for real estate and construction organisations. Our experts combine global insight with deep local knowledge to help you make confident decisions in this dynamic market.
Cyprus tax reform 2026 impacts real estate investors.
Highlights
Cyprus enacted comprehensive tax reforms effective 1 January 2026, introducing measures that significantly impact real estate transactions, holding and investment structures. Understanding these changes is essential for making informed investment decisions.
The corporate income tax rate increased from 12.5% to 15% on 1 January 2026, aligning Cyprus with the OECD's global minimum corporate tax rate whilst maintaining the jurisdiction's competitive position within the European Union.
New lifetime exemptions offer greater relief for individuals selling immovable property in Cyprus:
- General exemption increased to €30,000 (previously €17,086)
- Agricultural land exemption increased to €50,000 (previously €25,629)
- Primary residence exemption increased to €150,000 (previously €85,430)
The Special Defence Contribution (SDC) rate on dividends received by Cyprus tax-resident and domiciled individuals has been reduced from 17% to 5% for profits earned from 1 January 2026 onwards. This substantial reduction makes Cyprus holding structures considerably more attractive for real estate investors structuring property portfolios through corporate vehicles.
For dividends distributed from profits earned up to 31 December 2025, the 17% SDC rate continues to apply if the dividend is received on or before 31 December 2031.
The deemed dividend distribution (DDD) rules have been abolished for profits earned by Cyprus tax-resident companies after 1 January 2026.
The threshold for classifying property-rich companies has been reduced from at least 50% of immovable property value to at least 20%.
A new capital gains tax exemption applies to qualifying land-for-apartment or land-for-development exchanges, subject to specific conditions.
Rental income is no longer subject to SDC from 1 January 2026 and is taxed solely under income tax provisions. This simplification eliminates the prior dual taxation framework and provides clearer tax treatment for property owners who generate rental income.
Landlords must note that all rent payments for immovable property located in Cyprus must now be made exclusively through bank transfer, credit or debit card, or any other recognised electronic payment method. Cash rent payments are prohibited under the new transparency provisions.
Cyprus abolished stamp duty for most transactions effective 1 January 2026, reducing administrative costs and transaction friction. Limited exceptions remain for specific real estate, banking and insurance transactions.
RSM experts help you reach your goals and aspirations
Whether you are a private entity, public company, or individual investor, our experts support you through every stage of your real estate journey. We provide tailored services that bring clarity to your financial position and empower you for the future.
Our professionals offer deep insights across key areas:
Audit and assurance: Ensuring compliance while identifying opportunities for operational improvement.
Tax advisory: Strategic planning to optimise efficiency for acquisitions, disposals, and international holding structures.
Transaction support: Comprehensive due diligence, financial modelling, and valuation services for informed decision-making.
Consulting: Market entry strategies, business expansion planning, and advisory services to help you grow opportunities.
With a dedicated team, we combine international expertise with local market knowledge.
We support organisations with regulatory compliance, and tax planning, ensuring seamless service for clients operating across Cyprus. We place ourselves at the heart of your business to help you move forward with confidence.
An overview on real estate tax levies in Cyprus, offering an insight in where to invest in the specific market.
The Overview of the Cypriot Real Estate section includes the most important information about Cyprus Taxation rates for residents and non-resident individuals and companies.
Understanding the Opportunities in Cyprus Real Estate
The Cyprus real estate and construction industry continues to offer compelling opportunities for investors and developers who understand market dynamics and the evolving regulatory landscape.
With the 2026 tax reform creating new planning opportunities and the industry demonstrating sustained growth, now is the time to ensure your Cyprus strategy is optimised for success.
Our professionals have the expertise and capability to guide you through today's challenges and tomorrow's opportunities. Whether you are acquiring your first Cyprus property, establishing regional operations or managing a complex development portfolio, we deliver the understanding and confidence you need to move forward successfully.