Capital Gains Tax in Cyprus: A Comprehensive Guide for 2025

Cyprus offers a favorable tax environment, particularly concerning capital gains. Understanding the specifics of Capital Gains Tax (CGT) in Cyprus is essential for both residents and non-residents engaging in property transactions or investments.

What Is Capital Gains Tax in Cyprus?

Capital Gains Tax in Cyprus is levied at a flat rate of 20% on profits arising from the disposal of:Cyprusnext

• Immovable property located in Cyprus.
• Shares of companies that directly or indirectly own such immovable property. 

It’s important to note that CGT applies solely to gains from the sale of real estate situated in Cyprus or shares in companies holding such property. Other capital gains, such as those from the sale of shares listed on recognized stock exchanges, are generally exempt.

Key Exemptions and Exclusions

Cyprus provides several exemptions to reduce CGT liability:

• Primary Residence Exemption: A lifetime exemption of up to €85,430 is available on the sale of a primary residence, provided specific conditions are met.
• Agricultural Land: A lifetime exemption of up to €25,629 applies to the sale of agricultural land by a farmer.
• Other Exemptions: An exemption of up to €17,086 is available for other disposals.

Additionally, gains from the sale of shares listed on recognized stock exchanges are excluded from CGT.

Calculating Capital Gains Tax

The taxable gain is determined by subtracting the adjusted acquisition cost from the sale proceeds. The acquisition cost is adjusted for inflation using the official Retail Price Index. Allowable deductions include:

• Inflation Indexation: Adjusting the acquisition cost for inflation.
• Improvements: Costs of improvements made to the property.
• Transfer Fees: Expenses related to the transfer of ownership.
• Legal and Professional Fees: Costs incurred during the acquisition and disposal processes. 

Applicability to Non-Residents

Non-residents are subject to CGT in Cyprus on gains from the sale of:

• Immovable property located in Cyprus.
• Shares of companies that own such immovable property.

However, gains from the sale of shares listed on recognized stock exchanges are generally exempt from CGT. 

Recent Developments

As of 2025, the Cypriot government has announced tax reform measures, including an increase in the corporate tax rate from 12.5% to 15%. However, the scope of CGT remains unchanged, continuing to apply only to transactions related directly or indirectly to immovable property located in Cyprus. 

Conclusion

Cyprus’s Capital Gains Tax system is designed to be straightforward and investor-friendly, focusing primarily on real estate transactions within the country. With various exemptions and a flat tax rate, it offers clarity and predictability for taxpayers.

For more detailed information on taxation in Cyprus, visit Soneverse and explore our comprehensive Tax Guide.