Cyprus Rental Income Tax — Complete Landlord Guide for 2025

Rental income in Cyprus is taxed under three regimes at once: personal income tax, Special Defence Contribution (SDC), and the General Healthcare System (GHS). This guide walks through each, the deductions that often go missed, and the deadlines that matter.

1. Personal income tax on rents

Net rental income (after allowable deductions) is added to your other income and taxed under the standard 2025 Cyprus bands:

• €0 – €19,500 — 0%
• €19,501 – €28,000 — 20%
• €28,001 – €36,300 — 25%
• €36,301 – €60,000 — 30%
• Above €60,000 — 35%

The 20% automatic deduction

Cyprus tax law gives landlords an automatic 20% wear-and-tear deduction from gross rents, with no receipts required. On €12,000 of rent that's an instant €2,400 off your taxable income.

Other deductions

• Mortgage interest on the loan that financed the rental property
• Capital allowances — 3% per year on the building cost (not the land)
• Repairs and maintenance (not improvements)
• Insurance, management fees, advertising, legal fees
• Property taxes (municipal, sewage)

2. Special Defence Contribution (SDC) at 3%

Cyprus-domiciled residents pay 3% SDC on 75% of gross rents (effectively 2.25% of gross). Non-doms pay 0% SDC. If your tenant is a company or partnership, they withhold SDC at source; if your tenant is an individual, you self-assess and pay twice a year (30 June and 31 December).

3. GHS (General Healthcare System) at 2.65%

Both domiciled and non-dom landlords pay 2.65% GHS on gross rental income, capped at total annual income of €180,000. GHS uses the same self-assessment schedule as SDC.

Worked example — €12,000 of rent

Assume a Cyprus tax resident with a salary of €30,000 and €12,000 of rental income from a long-term let:

• Gross rent: €12,000
• Less 20% wear and tear: €2,400
• Less mortgage interest (example): €1,500
• Taxable rental income: €8,100 — taxed in the 30% band → ~€2,430 income tax
• SDC (if domiciled): €12,000 × 75% × 3% = €270
• GHS: €12,000 × 2.65% = €318
• Total tax cost on €12,000 of rent: ~€3,018

If the landlord is a non-dom, the SDC line is €0 — a €270 saving.

Short-term lets and Airbnb

Short-term tourist rentals registered with the Deputy Ministry of Tourism follow the same income-tax rules but typically attract 9% VAT on the rental fee (when below the VAT threshold the small-business exemption applies). VAT does not apply to long-term residential lets.

What landlords commonly get wrong

• Skipping the 20% wear-and-tear because they don't realise it's automatic
• Forgetting SDC self-assessment when the tenant is an individual
• Deducting "improvements" (kitchen renovation) as repairs — they're capital, not expenses
• Not declaring rental income because tax was withheld — you still file a TD1

Let us file your landlord return

We file Cyprus landlord TD1 returns from €30 — claiming every wear-and-tear, interest, and capital-allowance deduction. A licensed advisor reviews every case so you don't overpay.