Capital Gains Tax

Capital Gains Tax is imposed at the rate of 20%, in cases where the disposal is not subject to income tax, on the gains arising on the disposal of:

  • Immovable property situated in Cyprus
  • Shares of a company which owns property situated in Cyprus (but excluding companies listed in a recognised stock exchange)
  • Shares of a company which directly or indirectly participate in another company which owns immovable property situated in Cyprus and at least 50% of the market value of the particular shares is derived from the relevant property.

Exemptions

The following disposals of immovable property are exempt from capital gains tax:

  • Immovable property acquired during the period from 16 July 2015 to 31 December 2016
  • Transfer arising on death
  • Gift between husband and wife, from parents to children and between relatives up to third degree
  • Gift to a family company where the shareholders are members of the donor’s family and continue to be members of the family for 5 years following the transfer
  • Gift by a family company to its shareholders provided the property was originally acquired by the company in the form of donation
  • Gift to Government or to a charity
  • Transfer of ownership as part of reorganisations
  • Expropriations
  • Exchange or disposal of property under the Agricultural Land (Consolidation) Laws
  • Exchange of properties provided the gain is used to acquire the new property. The gain derived, which is not taxable, is deducted from the cost of the new property, thus deferring the payment of tax to a subsequent disposal.

Deductions

Certain deductions apply in the case of the disposal of a principal private residence, the disposal of agricultural land and other disposals subject to relevant conditions.