Capital Gains Tax

  • Capital Gains Tax is imposed (when the disposal is not subject to income or corporation tax) at the rate of 20% on gains from the disposal of immovable property situated in Cyprus including gains from the disposal of shares in companies which own such property, excluding shares listed on any recognised stock exchange.
  • Exemptions
    • Transfers arising on death.
    • Gifts from parent to child or between husband and wife or between up to third degree relatives.
    • Gifts to a company where the shareholders are members of the donor's family and the shareholders continue to be members of the family for 5 years after the transfer date.
    • Gifts by a family company to its shareholders, provided such property was originally acquired by the company by way of donation. The property must be kept by the donee for at least 3 years.
    • Gifts to charities and the government.
    • Transfers as a result of reorganisation.
    • Expropriations.
    • Exchange of properties i.e any gain is deducted from the cost of the new property i.e. payment of tax is deferred until the disposal of the new property.
  • Determination of capital gain
    • The cost which is deducted from gross proceeds on disposal of the property, is the market value at 1/1/1980, or the cost of acquisition and improvement is made after 1/1/1980, as adjusted for inflation up to the date of disposal on the basis of the consumer price index in Cyprus.
    • Expenses relating to the acquisition and disposal of immoveable propertly are also deducted, subject to certain conditions e.g. transfer fees, legal expenses, estate agent's fees etc.

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