Rental Income Tax in Cyprus: Individuals and Companies

Cyprus rental taxation changed materially from tax year 2026. Rental income is no longer subject to Special Defence Contribution. It remains within income-tax rules and, for an individual, can also be subject to GHS/GESY. VAT depends on the nature of the letting and the supplier's position.

Individual landlords

A Cyprus tax resident generally declares worldwide rental income; a non-resident applies the Cyprus-source rules to Cyprus rent. From 2026, taxable income uses the current personal bands from 0% on the first EUR 22,000 to 35% above EUR 72,000.

For rent from a building, the Tax Department's return instructions provide a statutory deduction equal to 20% of gross building rent. That is not a universal 20% deduction for land, parking or every property receipt. Capital allowances and qualifying finance costs are separate and require evidence and the statutory conditions.

GHS/GESY on individual rental income

The published individual GHS rate for rent is 2.65%. The EUR 180,000 ceiling is shared across covered income categories and the official ordering rule matters where a person has salary, pension, dividends, interest and rent. It is therefore wrong to grant a fresh EUR 180,000 cap to rental income in isolation.

Special Defence Contribution after 2025

The former SDC charge on 75% of gross rents applied through tax year 2025. From tax year 2026 rent is outside SDC. Old articles and 2025 return guides still showing rental SDC should not be used for a 2026 computation.

Cyprus company landlords

A Cyprus company is generally subject to 15% corporate income tax from 2026 on taxable rental profit after deductions allowed by law. A company does not pay the individual's 2.65% GHS charge. Related-party rent, financing, transfer pricing, capital allowances, interest limitation, VAT and property-rich-company rules still require their own analysis.

VAT and short-term accommodation

Long-term letting of immovable property and commercial leasing cannot be reduced to one VAT rule. The use, parties, election or exemption and current VAT legislation control the result. Registered self-service accommodation and similar taxable accommodation are generally within the 9% VAT category. Registration with the Deputy Ministry of Tourism is a separate legal requirement before advertising or operating qualifying self-service accommodation.

Filing and evidence

Keep the title or lease, tenancy agreement, rent ledger, bank receipts, invoices, loan documents, capital-allowance schedule and any foreign-tax evidence. From tax year 2026 the individual-return obligation is broader, and returns move to Tax For All. Provisional-tax and payment obligations must be assessed against the taxpayer's total position.