Capital gains tax is imposed on gains from the disposal of immovable property situated in Cyprus including gains from the disposal of shares in companies, which own immovable property situated in the Republic and such shares are not listed in stock markets.

TAX RATE AND DETERMINATION OF PROFIT
The tax is imposed on the net profit from disposal at the rate of 20%. The tax is payable within one month from the date of the disposal.

The net profit is calculated as the disposal proceeds, less the greater of the cost or market value on 1 January 1980 adjusted for inflation. Inflation is calculated using the official Retail Price Index.

EXEMPTIONS
The following disposals of immovable property are not subject to Capital Gains Tax:

• Transfer arising on death;
• Gift made from parent to child or between husband and wife or between up to third degree relatives;
• Gift to a limited company where the company’s shareholders are members of the donor’s family and the shareholders continue to be members of the family for five years after the date of transfer;
• Gift by a family company to its shareholders, provided such property was originally acquired by the company by way of donation. The property must be kept by the recipient for at least 3 years;
• Gift to charities and Government;
• Transfer of shares or immovable property as a result of reorganization;
• Exchange or disposal of immovable property under the Agricultural Land(Consolidation)Laws;
• Gain on disposal of shares, which are listed on any Stock Exchange;
• Transfer of property between ex-husband and ex-wife whose marriage has been dissolved following court order and the transfer of property between such people in the process of regulating matrimonial matters as per the relevant legislation.

LIFETIME EXEMPTIONS FOR INDIVIDUALS

Individuals can deduct from the capital gain the following:

The above exemptions are given only once and not for every disposal. An individual claiming a combination of the above is only allowed a maximum exemption of €85,430.07.