The 2026 Cyprus tax reform: what changes for an individual

You need this if

• You are a Cyprus tax resident and want to know what your 2026 income will be taxed at.
• You have children, pay rent or a housing loan, upgraded your home’s energy performance, bought an electric car, or insure a home against natural disasters — four of the new deductions.
• You receive dividends from a Cyprus company, or rent out property: both are treated differently from 2026.
• You are between 25 and 70 and have little or no income — because from 2026 that no longer excuses you from filing.

You do not need this if

• You are filing for tax year 2025. Nothing here applies to that return: the old bands, the €19,500 threshold and the old rules stand, and the return is still filed in TAXISnet.
• You are asking about corporate tax or the wider business measures. This page is the individual’s half of the reform.

• Your gross family income for the year — the income criteria for most of the new deductions are tested on the family, not on you alone.
• The number of dependent children and their details, since the child deduction rises with each one.
• The interest certificates for a housing loan on your main residence, or the tenancy agreement and proof of rent paid for it.
• Invoices for energy-efficiency work on the main residence, for renewable-energy systems and storage batteries, or for an electric vehicle.
• The insurance premium receipts for a home insured against natural disasters — the one new deduction with no income test.
• Form T.D.59 for your employer, which is where the deductions reach your monthly PAYE rather than waiting for the return.

1. 1

   Start with the new bands

   From tax year 2026 the tax-free amount rises from €19,500 to €22,000. Above it, 20% applies from €22,001 to €32,000, 25% from €32,001 to €42,000, 30% from €42,001 to €72,000, and 35% above €72,000.

2. 2

   Check whether your family passes the income criteria

   Most of the new deductions are given only where the total gross family income stays within limits: €100,000 for a family with no children or with one or two, €150,000 with three or four, and €200,000 with five or more. A person living without a spouse, a civil partner or dependent children counts as a single person, with a limit of €40,000.

3. 3

   Take the child deduction, which grows with each child

   Each biological or adoptive parent gets a deduction for every dependent child: €1,000 for the first, €1,250 for the second, and €1,500 for the third and each further child.

4. 4

   Take the housing deduction — once, not twice

   Interest on a performing housing loan for buying or building your main residence, or rent paid for using a main residence in Cyprus, gives a deduction of up to €2,000 for each spouse, civil partner or single person. If you paid both interest and rent in the same year, the €2,000 is the total, not €2,000 each. A restructured loan still counts as performing, provided the instalments were paid without fail up to 31 December.

5. 5

   Take the energy and electric-vehicle deduction

   Capital expenditure on improving the energy performance of your main residence in Cyprus, on energy-efficiency technical systems, renewable-energy systems and electricity storage batteries there, and on an electric vehicle, is deductible at the actual amount spent — capped at €1,000 in the tax year for each spouse, civil partner or single person. It is subject to the same income criteria.

6. 6

   Take the home insurance deduction, which ignores your income

   Premiums for insuring a home against natural disasters — fire, earthquake, flood and the like — are deductible up to €500 per owner, for all premiums and all homes, in each tax year. Unlike the others, this deduction is not subject to the income criteria, and it is not limited to the main residence: a holiday home or a home you rent out counts too.

7. 7

   Note what changed on dividends, interest and rent

   The defence contribution on dividends falls from 17% to 5%, with a transitional rule: dividends paid by a Cyprus resident company out of profits of 2025 or earlier keep the 17% for payments up to 2031. The deemed distribution is abolished from 2026. Rental income leaves the defence contribution altogether — for everyone, not only for non-doms — while GESY at 2.65% stays on all of it.

8. 8

   File the return, even if you earned nothing

   From tax year 2026 a Cyprus tax resident who has completed 25 but not 71 years of age by 31 December must file a return whatever their income, alongside anyone with gross income under article 5 of the Income Tax Law. Only someone with no gross income who is under 25 or over 70 is outside it. The 2026 return is filed during 2027, by 31 July 2027, and individual returns move to the Tax For All portal.

   PracticeThe Council of Ministers keeps the power to exempt categories of people by decree, as it has done in past years — so the obligation is worth re-checking each spring.

Tax-free amount

€22,000Up from €19,500, from tax year 2026.

Bands from 2026

20 / 25 / 30 / 35%€22,001–32,000 at 20%, €32,001–42,000 at 25%, €42,001–72,000 at 30%, above €72,000 at 35%.

Child deduction

€1,000 / €1,250 / €1,500First, second, and third and each further dependent child.

Housing deduction

up to €2,000Interest on a performing housing loan or rent for the main residence — €2,000 in total, per spouse, partner or single person.

Energy upgrade and electric vehicle

up to €1,000The actual capital expenditure, per spouse, partner or single person, income-tested.

Home insurance against natural disasters

up to €500Per owner, for all premiums and all homes. Not income-tested, and not limited to the main residence.

Family income limits

€100,000 / €150,000 / €200,000No children or one or two; three or four; five or more. A single person: €40,000.

Defence contribution on dividends

5%17% still reaches dividends from Cyprus company profits of 2025 or earlier, for payments up to 2031.

Defence contribution on rents

abolishedFrom 2026, for everyone. GESY at 2.65% stays.

Filing obligation

ages 25 to 70, any incomeFor Cyprus tax residents. The 2026 return is due by 31 July 2027, in Tax For All.

• Applying the €22,000 to the 2025 return. The reform starts with tax year 2026; the return being filed now runs on €19,500 and the old bands.
• Claiming €2,000 for loan interest and another €2,000 for rent in the same year. The cap is €2,000 for both together.
• Assuming every new deduction is income-tested. The home insurance one is not, and it covers holiday and rented homes as well as the main residence.
• Testing the income criteria on your own income. They are measured on the gross income of the family, and the limit moves with the number of children.
• Expecting 5% on every dividend from 2026. Profits of 2025 and earlier, distributed by a Cyprus resident company, keep 17% until 2031 — the certificate has to say which year the profits belong to.
• Thinking the abolition of the defence contribution on rents is a non-dom benefit. It applies to everyone, and it is what makes non-dom status worth less than it was.
• Waiting for the return to claim the deductions. Form T.D.59 puts them into the monthly PAYE, which is where you feel them.
• Assuming a low income excuses you from filing. From 2026 a resident aged 25 to 70 files regardless.

Anything marked “practice” is what the department does in the office, not a rule you can hold it to. Rules carry a source.

• The Tax Department’s reform hub for individualsThe explanatory guide, the FAQ, the worked examples and the presentation.
• FAQ on the 2026 reform for individualsEvery figure on this page comes from here, question by question.
• Worked examples 1–16The department’s own arithmetic for families of different sizes.
• Form T.D.59 — the employee’s declaration for PAYEWhere the new deductions reach the monthly withholding.

• Tax Department, FAQ on the 2026 tax reform for individuals: the bands, the filing obligation for ages 25 to 70, the income criteria, and the amount of each new deduction11.05.2026
• Tax Department, explanatory guide to the implementation of the tax reform for individuals who are Cyprus tax residents, from tax year 202605/2026
• Special Contribution for the Defence Law 117(I)/2002 as amended by 245(I)/2025: the 5% on dividends, the transitional 17%, the abolition of the deemed distribution and of the charge on rents