Renting out property in Cyprus: the taxes and the paperwork

You need this if

• You own property in Cyprus and let it, whether you live here or not.
• You let a place through Airbnb, Booking or a similar platform — the treatment is different, and the return puts that income somewhere else entirely.
• Your tenant is a company, a partnership, a municipality or the state: they withhold, and you need to know what to expect on your statement.
• You are working out what to pay in June, July and December, when the self-assessment and temporary tax deadlines fall.

You do not need this if

• You are a tenant. Nothing here is charged on you — except the electronic-payment duty, which applies to how you pay.
• The property is owned by a company. The GESY exemption for corporate owners changes the picture, and the company files its own return.
• You are asking about capital gains on a sale. That is a separate tax with its own return.

• The tenancy agreements, and the tenant’s tax number where the tenant is a company, a partnership, a municipality, a community or the state.
• The certificates of tax withheld by such tenants — the defence contribution and GESY they deducted before paying you.
• The acquisition cost of the building, separated from the cost of the land, and the completion or acquisition dates: they set the capital allowances.
• The interest paid on any loan taken to buy or build the rented property.
• Your share of the property if it is owned jointly, since every figure in the return is declared at your share.
• For self-service accommodation let through a platform: the Ministry of the Interior registration, and the figures kept separately from ordinary rent.

1. 1

   Collect the rent electronically — this is now the law

   Since 1 July 2026, article 48A of the Assessment and Collection of Taxes Law requires rent for property in Cyprus to be paid only by bank transfer, by debit or credit card, or by another recognised electronic means. It applies to everyone, private or corporate, whatever the amount and whatever the property is used for, and a landlord may not accept rent in any other way.

2. 2

   Know which charges reach your rent

   Income tax, on the net figure after the allowances below. The defence contribution, at 3% of 75% of the gross — an effective 2.25% — but only up to tax year 2025 and only for someone who is both resident and domiciled: from tax year 2026 rental income is out of the defence contribution altogether. GESY, at 2.65% of the gross rent, which stays. And VAT, but only in the narrow case below.

3. 3

   Declare ordinary rent in Part 4C — and platform lettings elsewhere

   Rent from an ordinary letting goes in Part 4C of the return. Income from property let as self-service accommodation through an online platform — Airbnb, Booking and the like — does not belong there: it is declared in Part 4I, "any other income". That income is not subject to the defence contribution, and it carries GESY at either 2.65% or 4%, depending on the occupational category you pick in the same part.

4. 4

   Get the deductions right

   A flat 20% expenditure allowance is deducted automatically from gross rents, in the Republic and outside it — but not for land, parking spaces, "other property" or property under a requisition order. Capital allowances follow the property code: 3% a year for an office, shop, apartment or house over 33⅓ years, 4% for a warehouse or factory over 25 years, 7% for a factory or hotel acquired between 2012 and 2018, and nothing for the codes above. Interest on a loan taken to buy or build the property is deducted in full.

   PracticeThe acquisition cost in the return is the building only. Land never enters it, and neither does the Land Registry valuation on the title deed — a mistake that quietly inflates the allowance for years.

5. 5

   Pay the self-assessed GESY twice a year

   Where your tenant is an individual, nobody withholds anything: you pay the GESY yourself by 30 June and 31 December each year, under collection code 704. Where the tenant is a company, a partnership, a municipality, a community or the state, the tenant withholds and pays it, under code 714. Up to tax year 2025 the same pairing applied to the defence contribution: code 604 for self-assessment, code 0614 for the tenant’s withholding.

6. 6

   Pay the temporary tax if your income crosses the threshold

   Where your total gross income, rent included, exceeds €19,500 up to tax year 2025 or €22,000 from 2026, income tax is paid in advance in two instalments, on 31 July and 31 December of the year itself. The department publishes a guide for computing it, and the estimate can be revised.

7. 7

   Check whether VAT touches the lease at all

   VAT at the standard 19% applies to leasing immovable property only where the tenant carries out taxable transactions and is registered for VAT. Even then the landlord can opt out, by filing the declaration for non-imposition of VAT on a lease — form T.F.1220 — which is now submitted only through the Tax For All portal. The choice is permanent: it blocks input VAT recovery on future expenditure for that property and cannot be revoked, though it lapses when the property changes hands, leaving the new owner free to decide again.

Expenditure allowance

20% of gross rentAutomatic in the return. Not given for land, parking spaces, other property, or property under requisition.

Capital allowances

3%, 4% or 7% a year3% for office, shop, apartment, house over 33⅓ years; 4% for warehouse or factory over 25; 7% for a factory or hotel acquired 2012–2018.

Loan interest

deducted in fullOn a loan taken to buy or build the rented property.

Defence contribution, to 2025

2.25% effective3% of 75% of gross rent, for a resident and domiciled owner. Codes 604 self-assessed, 0614 withheld by the tenant.

Defence contribution, from 2026

abolished on rentsRental income is no longer subject to it at all.

GESY

2.65% of gross rentCodes 704 self-assessed by 30 June and 31 December, 714 withheld by a corporate tenant. Company owners are exempt.

Temporary tax

31 July and 31 DecemberWhere total gross income exceeds €19,500 to 2025, or €22,000 from 2026.

VAT on leases

19%, in one case onlyWhere the tenant makes taxable supplies and is VAT-registered; opt out irrevocably on form T.F.1220 through Tax For All.

Cash rent

prohibited from 1.7.2026Bank transfer, card or another recognised electronic means, whatever the amount.

• Taking rent in cash after 1 July 2026. The duty is on the person receiving it as much as on the person paying, and it has no minimum.
• Putting Airbnb income in Part 4C with ordinary rent. It belongs in Part 4I, it carries no defence contribution, and its GESY rate depends on the occupational category chosen there.
• Including the land in the acquisition cost. Capital allowances are computed on the building alone, and the Land Registry value on the title deed is not the cost either.
• Expecting the 20% allowance on everything. Land, parking spaces, "other property" and property under a requisition order get none.
• Waiting for the tenant to withhold when the tenant is an individual. Then nothing is withheld and the GESY is yours to pay, twice a year, under code 704.
• Assuming the defence contribution still applies to rent. It was abolished on rental income from tax year 2026 — for everyone, not only for non-doms.
• Filing the T.F.1220 election casually. It cannot be revoked, and it kills input VAT recovery on that property for as long as you own it.
• Forgetting the temporary tax. Rent counts towards the threshold that triggers it, and the two instalments fall inside the year the income is earned.

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

• The department’s page on rental incomeThe three charges, the collection codes, the VAT election and the electronic-payment duty.
• Guide for the completion of the 2025 returnPart 4C column by column: codes, dates, cost, the 20% allowance, capital allowances and interest.
• Form T.F.1220 — declaration for non-imposition of VAT on a leaseFiled through Tax For All. Irrevocable.
• Guide to computing the temporary income tax and GESY
• Interpretative circular 220 on VAT and rents

• Tax Department, “Εισόδημα από Ενοίκια”: article 48A and the electronic-payment duty from 1 July 2026, the three charges, the self-assessment and withholding codes, and the VAT election
• Guide for the completion of the income tax return for individuals 2025, Part 4C and Part 4I: property codes and amortisation rates, the exclusion of land, the 20% allowance, capital allowances, interest, and where platform lettings are declared06/2026
• Κ.Δ.Π. 423/2017 on the VAT election, and interpretative circular 220 on VAT and rents
• Special Contribution for the Defence Law 117(I)/2002 as amended by 245(I)/2025, for the abolition of the charge on rents from 2026