Capital gains tax valuations and 1 January 1980 values

How Cyprus capital gains tax works, in outline

Capital gains tax is charged at 20% on gains from the disposal of immovable property situated in Cyprus. It also catches gains on shares in companies that own such property.

From 1 January 2026 the share test tightened. Shares are within the charge where they derive at least 20% of their market value from Cyprus immovable property. The previous threshold was 50%. Group structures that sat outside the charge under the old test should be reviewed.

The tax is on the gain, not the price. The gain is the disposal proceeds less the deductible base, less indexation, less any lifetime exemption still available to you.

Why 1 January 1980 is the pivot

Cyprus capital gains tax only measures gains accruing from 1 January 1980. Anything before that date is outside the charge.

That gives two possible starting points:

• Property held on 1 January 1980. The deductible base is the market value of the property at 1 January 1980.
• Property acquired after that date. The deductible base is the cost of acquisition, plus the cost of any improvements, each taken at its actual date.

For property that has been in a family for decades, the 1980 value is usually the single largest number in the computation. A low or unsupported 1980 figure inflates the taxable gain and the tax with it.

The taxpayer has to substantiate the 1980 figure, and the Tax Department will require it to be supported. In practice that means a retrospective valuation prepared by a qualified valuer, set out with the evidence behind it.

What a retrospective 1980 valuation involves

A retrospective valuation is an opinion of market value at a past date, formed on the evidence a valuer would have had at that date. It is not today's value discounted backwards.

Our work on a 1980 valuation typically draws on:

• The title deed and the registration history of the parcel or unit.
• The cadastral plan, and the physical extent and boundaries as they stood in 1980.
• Land Registry sale evidence from the period, where obtainable for the locality.
• The planning and zoning position as it was in 1980, which is often materially different from today's.
• The state of the building at the date, its age, construction and services, established from the deed, from the owner's records and from photographs where they exist.
• Contemporary infrastructure and access to the parcel.

The report states the basis of value, the valuation date, the assumptions made, the evidence relied on and the limits of that evidence. It is prepared to RICS Valuation – Global Standards, the Red Book. Michael Efstathiou MRICS is registered with ETEK, the Cyprus Scientific and Technical Chamber, which is the legal precondition to valuing property in Cyprus.

Lifetime exemptions rose on 1 January 2026

The personal exemptions are lifetime allowances, not per-sale allowances. Once used, they are gone. They were increased with effect from 1 January 2026.

The principal private residence exemption carries a five-year occupancy condition. The overall cap limits the total you can claim across your lifetime, whichever combination of heads you use.

Indexation

The deductible base is not left in 1980 money. Costs are indexed for inflation from their date to the date of disposal, using the Cyprus Consumer Price Index.

Over four decades that adjustment is substantial. It is also mechanical, which makes the accuracy of the underlying 1980 figure, and the dates attached to each later cost, the part that actually decides the outcome.

What else is deductible

Beyond the base cost and indexation, the following are deductible where they relate to the property disposed of:

• Interest on loans related to the property.
• Transfer fees.
• Legal fees.
• Estate agent's commission.
• Documented improvement costs.

"Documented" is the operative word on improvements. Invoices, receipts, contractor agreements and permits should be kept together. Undocumented works are difficult to claim.

Property exchanges (antiparochi)

From 1 January 2026, property exchanges are exempt from the 20% capital gains tax where the construction is completed within five years. This is a meaningful change for landowners contributing a plot to a developer in return for units.

Two further exemptions are worth knowing. Land acquired between 16 July 2015 and 31 December 2016 at market value from unrelated parties is exempt on a future disposal, subject to conditions. And the exemption for disposals under primary-residence debt restructuring now applies up to a €450,000 threshold, extended to 31 December 2030.

A note on stamp duty

Stamp duty was fully abolished for documents executed on or after 1 January 2026, by Law 239(I)/2025. Many Cyprus websites still list it as a cost of sale. It is not one.

What we need from you

• The title deed, or the registration number and district.
• The cadastral plan, if you hold it.
• Anything showing the property's condition and extent at the valuation date: photographs, old permits, building plans, inheritance or division documents.
• Details and dates of improvements, with invoices where available.
• The proposed disposal date, or the actual one.

If you do not have all of this, send what you have. Missing documents can usually be obtained.

How to instruct

Send the property details to [email protected] or call +357 25254222. We confirm scope, fee and the basis of value in writing before starting.

We work with your accountant or lawyer directly where that is easier, and can supply the report in the form they need for filing.

This page is general information, not tax advice. Your accountant or lawyer should confirm your position before you act on it. Last reviewed: August 2026.