Personal Income Tax Changes in Cyprus 2026: How They Affect Real Estate Buyers and Landlords
From 1 January 2026, Cyprus introduced important changes to its personal income tax system as part of a wider tax reform. These changes directly impact real estate buyers, landlords, and investors earning rental income, making property ownership and buy-to-let investments more attractive.
What Changed in Personal Income Tax?
The 2026 tax reform increased the tax-free income threshold and adjusted the personal income tax bands. This means that individuals can now earn more income before tax applies, and income above the threshold may be taxed more efficiently than before.
For property owners and landlords, this is particularly important, as rental income is taxed as personal income (unless the property is held through a company).
How Is Rental Income Taxed in Cyprus?
Rental income in Cyprus is added to a person’s total annual income and taxed according to the personal income tax bands. After allowable deductions, the remaining rental profit is subject to income tax.
Common deductible expenses include:
- Property maintenance and repairs
- Management and agent fees
- Insurance costs
- Interest expenses (where applicable)
With the higher tax-free threshold introduced in 2026, many landlords — especially those with one or two properties — may now fall partially or entirely below the taxable income level, reducing or eliminating income tax on rental profits.
Improved Returns for Buy-to-Let Investors
For buy-to-let investors, the new tax bands mean higher net returns. Rental income that previously fell into taxable brackets may now be taxed at a lower rate or remain tax-free, depending on the investor’s total income.
This makes Cyprus even more attractive for:
- First-time buy-to-let investors
- Individuals purchasing a second property for rental income
- Foreign buyers relocating and renting out property
Lower personal tax pressure improves cash flow and strengthens the overall return on investment.
Benefits for Those Relocating to Cyprus
The personal income tax changes also benefit individuals planning to relocate to Cyprus, whether for lifestyle or investment reasons. With a higher tax-free threshold and a favourable tax structure, rental income earned locally can be managed more efficiently.
When combined with Cyprus’s existing advantages — such as a strong legal framework, attractive residency options, and high demand for rental properties — the 2026 tax changes further enhance the country’s appeal to international buyers.
What This Means for Property Buyers in 2026
For anyone considering buying property in Cyprus, especially as a rental investment, the updated personal income tax system offers:
- Lower effective tax on rental income
- Improved buy-to-let returns
- Better affordability and long-term planning
- Increased appeal for relocation and investment strategies
As with all tax matters, the exact impact depends on personal circumstances, total income, and ownership structure. Proper planning remains essential to fully benefit from the new tax rules.
Expert Guidance Matters
Understanding how personal income tax applies to rental income is a key part of making a successful real estate investment. At The Property House, we work closely with legal and tax professionals to help our clients structure property purchases efficiently and maximize returns under the 2026 tax framework.
For more information about rental income tax in Cyprus, buy-to-let opportunities, or relocating and investing in property, contact The Property House for tailored advice.