About us Buying personally or through a company in Cyprus
Comparison
| Topic | Personal purchase | Purchase through a Cyprus company |
|---|---|---|
| Best fit | One home or one small rental unit | Development, more than one investor, commercial rental |
| Setup time | No setup | Company registration and a bank account. These are often the slowest steps. |
| Tax on profits | Personal income tax on rental income | Corporate tax of 15% |
| Profit extraction | Not applicable | Dividends. A tax resident who is domiciled in Cyprus pays 5% on profits from 2026. A non-dom pays no dividend tax, only the 2.65% healthcare contribution. |
| CGT lifetime exemption | Available to individuals | Not available to companies |
| VAT recovery on new property | Possible as a VAT taxable person | Possible after VAT registration |
| Exit | Sale of the property | Sale of the property or sale of the shares |
Tax changes from 2026
- The corporate tax rate increased from 12.5% to 15%.
- The tax on dividends decreased from 17% to 5% for Cyprus tax residents who are domiciled in Cyprus. The 5% rate applies to dividends from profits earned from 2026; dividends from earlier profits stay at 17%.
- The deemed dividend distribution rule no longer applies to profits from 2026. Profits from 2025 still follow the old rule, with distribution by 2027.
- The notional interest deduction (NID) remains available. The company must increase its registered share capital to use it.
- For shareholders who are tax resident and domiciled in Cyprus, private use of company assets, for example living in a company-owned home, can be taxed as a disguised dividend at 10%, on the market value of the asset. It can also count as a taxable benefit in kind.
Tax residents with non-dom status pay no tax on dividends (Special Defence Contribution). They still pay the 2.65% General Healthcare System contribution on dividends, on up to €180,000 of income a year. The 5% rate applies only to tax residents who are domiciled in Cyprus.
Share sale or asset sale
Cyprus does not tax gains on the sale of shares. This exemption does not apply to shares in a company that owns Cyprus property. A share sale can avoid the Land Registry transfer fees.
The Tax Department taxes the gain on a sale of shares in a company that holds Cyprus immovable property. A share sale of a property company does not remove CGT for the seller.
Structures for projects with more than one investor
A special purpose vehicle (SPV) holds one project. Typical terms in a shareholder agreement are:
- Two classes of shares, one for investors and one for the manager
- A profit split that is linked to the classes of shares
- Reserved matters that need investor approval
- An investment committee with an independent chair
Land exchange (antiparochi)
In a land exchange, the landowner gives the plot to a developer. The developer builds the project and gives part of the units to the landowner. The split of units is negotiated for each deal. The landowner gets a lower return but has no development risk.
From 2026, a land-for-development agreement can qualify for the capital gains tax exemption for exchanges of property, under conditions. Check the conditions with a tax adviser before you sign.
Tax residency and non-dom status
- 183-day rule. If you spend more than 183 days in Cyprus in a tax year, you are a tax resident.
- 60-day rule. You must meet all of these conditions. You spend at least 60 days in Cyprus. You do not spend more than 183 days in another country. You are not a tax resident of another country. You have a permanent home in Cyprus that you own or rent. You carry on a business, have employment, or hold an office in a Cyprus company.
- Non-dom extension. After the first 17 years, you can extend non-dom status for 5 years. The extension costs €250,000 for the period. You can apply for 2 such periods.
Quick answers
- What is the corporate tax rate in Cyprus from 2026?
- 15%, up from 12.5%.
- How are dividends from a Cyprus company taxed from 2026?
- A tax resident who is domiciled in Cyprus pays 5% on dividends from profits earned from 2026, and 17% on dividends from earlier profits. A non-dom pays no dividend tax, only the 2.65% healthcare contribution.
- Can I live in a property that my company owns?
- It has a tax cost. For shareholders who are tax resident and domiciled in Cyprus, private use of company assets can be taxed as a disguised dividend at 10% on the market value of the asset, and it can also count as a taxable benefit in kind.
- Can a company use the capital gains tax lifetime exemption?
- No. The lifetime exemption is available to individuals, not to companies.
- Does selling the shares of a Cyprus property company avoid capital gains tax?
- No. The Tax Department taxes the gain on a sale of shares in a company that holds Cyprus immovable property. A share sale can avoid the Land Registry transfer fees.
- What is a land exchange (antiparochi)?
- The landowner gives the plot to a developer. The developer builds the project and gives part of the units to the landowner, who gets a lower return but has no development risk.
- What is the Cyprus 60-day tax residency rule?
- You become tax resident if you spend at least 60 days in Cyprus, no more than 183 days in another country, are not tax resident elsewhere, keep a permanent home in Cyprus and carry on a business, have employment or hold an office in a Cyprus company.
- Can non-dom status be extended after 17 years?
- Yes. You can extend it for 5 years at a cost of €250,000 for the period, and you can apply for 2 such periods.
This guide is general information, not legal or tax advice. Rules change and every case differs; check with a qualified advisor before you act.
