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Cost of ownership in Cyprus

Cost of ownership in Cyprus Ownership costs in Cyprus consist of various taxes and fees, including community taxes and communal fees.

Read below to find out the types of costs you may incur when you own a propertyin Cyprus.

Ongoing costs of ownership

The good news is that the principal council tax in Cyprus, known as Immovable Property Tax (IPT) has been abolished. There are however municipality/ community taxes, to cover other local services and these are based on a property’s 1980 value, meaning a budget of just €250-€350 a year should cover them, depending on location.

Properties within resorts or complexes will incur communal fees. For a two-bedroom apartment in Paphos, budget €400-€600 a year, depending on facilities - more if you have a lift and gated entry. In the Famagusta area, community fees might be €250-500, depending on property size and location. Fees there can be several thousands per year.

Rental rules

Current Cypriot law says that only property classed as tourist accommodation by the planning authority in Cyprus can be let to holidaymakers. In addition, the owner should obtain a licence from the Cyprus Tourism Organisation (CTO), which will be granted on the condition your property meets certain health and safety standards.

The CTO rules for rentals are strict but the government is looking into changing them. For non-residents, there are generous allowances and tax is not payable on the first €22,000 of rental income, after which the rate scales up from 20%. But Gesy tax of 2.65% is levied on all rental income. There is a double taxation treaty between Cyprus and the UK.

Capital gains tax

When you come to sell, unlike in the UK, Capital Gains Tax (CGT) is payable on your own, main home when you sell it in Cyprus. On gains from disposal of immovable property situated in Cyprus, the first €17,086 is exempt for each person.

After that, capital gains tax is 20 per cent. The gain is the difference between the sales proceeds and the original cost of the property. The seller is entitled to a further allowance regarding the transfer fees paid, inflation rate per year and the cost of any additions made to the house.

Gains from the disposal of a private residence are exempt up to €85,430 in total if the owner resides in it continuously for at least five years prior to disposal. There is no inheritance tax or gift tax in Cyprus.

FAQs: Costs of ownership in Cyprus

Do you pay annual property tax in Cyprus?

No. The Immovable Property Tax was abolished in 2017, meaning there is no nationwide annual property ownership tax. However, homeowners still pay local municipal taxes and refuse collection fees, which usually amount to a few hundred euros per year.

What are the main ongoing costs of owning a home in Cyprus?

Owners should budget for local property taxes, utilities (electricity, water, internet), insurance, refuse collection, and community fees if buying in a managed development. Maintenance and repairs should also be factored in, especially for older properties or holiday homes left empty for long periods.

How much are utilities in Cyprus?

Electricity is one of the higher utility costs in Cyprus, particularly in summer due to air conditioning use. A typical two-bedroom home may spend €120-€200 per month on electricity and water. Internet packages start from around €30 per month.

Are there communal or management fees in Cyprus?

Yes. Apartments and properties in complexes with shared pools, lifts, or gardens usually have community fees. These vary widely depending on the facilities, typically ranging from €50 to €150 per month.

Do you need home insurance in Cyprus?

Yes. Although not legally required, home insurance is strongly recommended. Basic policies start from around €150 per year, with costs increasing for larger or higher-value properties. Mortgage lenders usually require proof of insurance.

What are the costs for maintaining a villa in Cyprus?

Villa owners should budget for pool cleaning, gardening, and general maintenance. Pool servicing costs around €80-€120 per month, while gardening services may add €50-€100 per visit depending on plot size.

Are there hidden costs of property ownership in Cyprus?

In addition to taxes and utilities, owners should consider air conditioning servicing, pest control, and the cost of managing a holiday home from abroad. If renting out the property, management and letting fees will also apply.

How should I budget for ownership costs as an overseas buyer?

It is sensible to set aside at least 1-2% of the property’s value annually to cover taxes, utilities, maintenance, and unexpected expenses. If you rely on income or pensions from abroad, remember that exchange rates can affect your running costs. Money can be transferred to Cyprus using specialist currency services - get in touch with A Place in the Sun Currency today to see how we can help.

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