Rental Income Tax for Landlords in Cyprus: The 2026 Guide

From 1 January 2026 a Cyprus landlord’s rent is subject to two charges: personal income tax (progressive) and the General Healthcare System (GeSY/GHS) contribution at 2.65%. The previously applicable Special Defence Contribution on rent no longer applies.

Before tax, a flat 20% wear-and-tear allowance is deducted, so only 80% of the gross rent enters the income-tax computation. That 80% is then taxed at your marginal income-tax rate, and GeSY is charged separately.

The most important, and freshest, change is the abolition of the Special Defence Contribution on rental income from 1 January 2026. Previously, landlords paid SDC calculated at 3% on 75% of gross rent, on top of income tax — a charge that particularly affected Cyprus tax-resident, domiciled landlords.

That charge is now gone. Many older guides and calculators still describe the “3% on 75%” SDC formula; if a source still shows it, it predates the 2026 reform.

Two charges remain on rental income. Income tax is progressive, with a tax-free band and rising rates up to 35%; GeSY is a flat 2.65% on income, subject to an overall annual cap. The table shows the broad 2026 income-tax structure — confirm the exact thresholds for your year, as they were revised in the reform.

Landlords benefit from a flat 20% deemed-expense (wear-and-tear) deduction on gross rent — you do not have to itemise to claim it, and it immediately reduces the taxable base to 80% of the rent. Beyond that flat allowance, other genuine costs of letting may be deductible, subject to the usual evidence requirements.

Typical additional deductions include interest on a loan used to acquire the let property, buildings insurance, and repairs and maintenance. Because how these interact with the flat 20% allowance depends on the property and the year, a landlord with significant expenses should take advice to optimise the position.

A simple example shows how the pieces fit together for 2026. Figures are illustrative and depend on your total income and the year’s thresholds.

The basic building blocks are the same, but the scope differs. A Cyprus tax resident is taxed on worldwide income, so foreign rents come into charge; a non-resident is taxed only on Cyprus-source income, which includes rent from a Cyprus property.

Either way, rent from a Cyprus property is taxable in Cyprus. Non-resident landlords should also consider how their home country taxes the same rent and whether a double-tax treaty provides relief — a point on which cross-border landlords should take advice.

A compliance change accompanies the tax reform: from 1 July 2026, rent above a monthly threshold (in the region of €500) must generally be paid through the banking system — by transfer rather than cash — for it to be properly recognised.

The aim is to formalise the rental market and improve tax compliance. Landlords and tenants alike should route qualifying rent through bank payments and keep records, as cash arrangements above the threshold may not be recognised and can create difficulties.

Tax is only half of a landlord’s legal picture — the Rent Control Law also matters, especially for older properties. It creates a protected category of “statutory tenant” with security of tenure, and regulates how much and how often rent can be increased for controlled properties.

For controlled tenancies, a landlord cannot simply end the tenancy at will — eviction requires a lawful ground and, usually, a Rent Control Court order. Recognised grounds include substantial rent arrears (after the tenant is given the chance to pay), using the property for an unlawful purpose or causing a nuisance, and the landlord’s genuine need to occupy the property.

Because the procedure is technical and tenant-protective, a landlord seeking possession of a controlled property should follow the statutory steps precisely and take advice — errors can delay or defeat an otherwise valid claim.