What Tax Is Paid on Renting Out a Flat in Cyprus in 2026

Rental income from a flat in Cyprus is subject to income tax and a contribution to the GeSY national health system. Since 2026, income up to €22,000 a year has been tax-free. For example, if a flat brings in €12,000 a year and the owner earns nothing else in Cyprus, there is usually no income tax to pay.

This article explains how to work out tax on rent, which expenses can be deducted, how the GeSY contribution is paid and which deadlines apply. All the ways of letting and the owner's obligations are described in our article on how to let a flat in Cyprus.

Content:

• Who pays tax on rent
• The income tax scale
• How to work out taxable income
• The GeSY health system contribution
• If the flat is let short-term
• Deadlines and how to pay
• Tax in the owner's country of residence
• Worked example
• Who should talk to an accountant
• What changed in 2026
• Frequently asked questions
• Find a flat in Cyprus

Who pays tax on rent

Tax on rent is paid by the owner of the flat. Cyprus tax residents declare their worldwide income, while non-residents declare only income earned in Cyprus. Income from letting a Cypriot flat counts as Cypriot income, so owners who live in another country declare it too.

To file a tax return, the owner needs a Cypriot tax identification number. It can be obtained remotely, including through a representative.

The income tax scale

A new scale has applied in Cyprus since 1 January 2026. Each slice of income is taxed at its own rate:

Rental income is added to the owner's other taxable income in Cyprus, such as a salary. If the owner lives and works in Cyprus, the rent may fall into a higher band.

How to work out taxable income

For long-term letting, the following are deducted from the rent received:

1. 20% without supporting documents. This deduction covers repairs and maintenance.
2. Interest on a loan taken out to buy the flat.
3. Wear and tear on the building — 3% of its value each year, excluding the land.

What is left is taxable income, to which the scale is applied.

"Non-residents often don't file a return at all because the tax due comes to zero. But a return still has to be filed, otherwise the tax department will impose a penalty even if there is nothing to pay," warns a Limassol tax adviser.

The GeSY health system contribution

On top of income tax, the owner pays 2.65% to the GeSY national health system. This applies to non-residents too. The amount subject to the contribution is capped at €180,000 a year.

How it is paid depends on the tenant:

• the tenant is a company: it withholds 2.65% from the rent and pays the contribution itself;
• the tenant is a private individual: the owner pays the contribution twice a year, by 30 June and by 31 December.

If the flat is let short-term

For the tax department, short-term letting of a registered flat with a regular turnover of guests is a business. That brings some differences:

• instead of the 20% deduction, expenses such as cleaning, utility bills, booking platform commission and repairs are deducted;
• the GeSY rate and any obligation to charge VAT depend on how the tax department classifies the income and on the owner's turnover, so they are best confirmed with an accountant.

See also how to register a flat in Cyprus for short-term letting.

Deadlines and how to pay

Provisional tax is paid on an estimate of expected income. Once the return is filed, it is reconciled with the actual figure.

Tax in the owner's country of residence

The country where the owner lives may also tax income from a Cypriot flat. Double tax treaties help avoid paying twice: as a rule, the country of residence gives credit for tax already paid in Cyprus. A tax adviser can confirm how this works in a given country.

Worked example

The owner lives abroad and lets a flat in Limassol long-term for €1,250 a month. There is no mortgage, and the building, excluding the land, is valued at €150,000. No other Cypriot income.

Taxable income is below €22,000, so income tax is usually not charged. The GeSY contribution is paid in any case, and its exact amount is best worked out with an accountant. The return is due by 31 July the next year.

Who should talk to an accountant

• Owners with other income in Cyprus. Rent is added to it and may fall into a higher band.
• Owners who let short-term. Expense records are needed, and with significant turnover, VAT returns as well.
• Owners who let several flats. Deductions and wear and tear need to be allocated correctly to each one.

What changed in 2026

• The tax-free income threshold was raised to €22,000 a year.
• The special defence contribution on rent no longer applies. It used to be 3% on 75% of rental income, or 2.25% of the total rent.
• Rent has been payable only electronically since 1 July 2026; tenants who pay cash forfeit their own deduction.
• New tax deductions for families were introduced for rent and mortgage interest. They go to the tenant, not the landlord.

Frequently asked questions

How much tax is paid on rent in Cyprus?

Nothing on the first €22,000 a year; above that, rates run from 20% to 35%, plus 2.65% for GeSY.

Which expenses can be deducted from rental income?

For long-term lets: a flat 20% with no receipts, mortgage interest on the purchase loan and 3% a year for wear and tear on the building. For short-term lets run as a business: actual costs.

Do I need to file a tax return if no tax is due?

Yes. The return for each year is due by 31 July of the next year, even when nothing is payable.

Is the defence contribution paid on rent in 2026?

No. The special defence contribution on rental income was abolished from 1 January 2026.

Find a flat in Cyprus

If you are choosing a flat to let, work out the tax and contributions in advance: they determine what you actually earn. When choosing a flat to let on Cyprus-Real.Estate, look at both flats in Cyprus and new developments.