Can a UK citizen own property in Cyprus?

Yes, with free District Administration permission under Cap. 109 (form COMM 145). UK-only buyers can hold up to two units, or one plot of up to 4,000 m² for their own home.

How much do I need to invest for Cyprus permanent residency?

At least €300,000 plus VAT in new residential property bought from a developer, with secure income from abroad of at least €50,000 a year. See the PR investment route.

How long can you stay in Cyprus if you own a property?

Ownership alone does not change your visa-free stay of up to 90 days. You need PR by investment or another residence permit to live here.

How is rental income taxed in Cyprus in 2026?

Tax residents pay income tax at 0% on the first €22,000 of total income, then 20% to 35%, after a 20% deemed expense deduction. GeSY is 2.65% of rental income. SDC on rent was abolished from 1 January 2026.

Is there capital gains tax on selling property in Cyprus?

Yes, 20% on the gain. From 2026 the lifetime exemptions are €30,000, or €150,000 for a main residence.

What is the 2% rule for property?

It is a buy-to-let rule of thumb from the US: monthly rent should be at least 2% of the purchase price. No Paphos property meets it. At the typical 4% gross yield, monthly rent is about 0.33% of the price, so a €250,000 flat lets for around €830 a month.

Is property in Paphos a better investment than Limassol?

Paphos is cheaper to buy into and rose faster in the year to Q2 2026 (9.6% against 7.8%), but Limassol yields more rent, about 6% gross against about 4% in Paphos. Compare them in Paphos vs Limassol.

Can I get a mortgage on an investment property in Cyprus?

Yes, but banks can lend at most 70% of the value on property that isn't your main home, and often less to non-residents. The average rate on new housing loans was 3.23% in June 2026.

Can foreigners rent out property in Cyprus?

Yes. Rental income is taxed in Cyprus whether or not you live here, and holiday lets need registration with the Deputy Ministry of Tourism. From 1 July 2026 tenants must pay rent electronically.

New apartment complex with a communal pool near the Paphos coast

Property investors

Cyprus Property Investment: What UK Investors Need to Know About Paphos

Cyprus property can earn rent, grow in value and, above €300,000 on a new home, unlock permanent residency. Paphos prices rose 9.6% in the year to Q2 2026, but gross yields sit nearer 4% than the 6 to 10% some agents quote.

Talk to a property lawyer PR by investment

The short version

PR by investment: buy new residential property worth €300,000+ plus VAT from a developer and show €50,000 a year of secure income from abroad.

Yields: Paphos gross rental yields are around 4% (tier-2 market data). Treat higher promises with suspicion.

Rental income tax: 2026 bands with 0% on the first €22,000, a 20% deemed expense deduction, 2.65% GeSY, and no SDC on rent from 1 January 2026.

Capital gains tax: 20% on Cyprus property gains, with lifetime exemptions raised to €30,000 (and €150,000 for a main home) from 2026.

Costs going in: transfer fees or VAT, legal fees, no stamp duty since 1 January 2026.

Non-EU limit: UK-only buyers may hold two units under Cap. 109, and a 2026 bill could tighten this.

Guides for property investors

New-build apartment development with balconies in Paphos

Residency

PR by investment

The €300,000 fast-track permit, step by step.

Explore

New-build villas on a hillside near Paphos, Cyprus

Residency

Property rules for PR

What counts as a qualifying purchase.

Explore

Modern limestone villa with a small pool in the hills near Paphos

Buying

Buying property in Paphos

Process, fees and the transfer fee calculator.

Explore

Apartment block under construction on the edge of Paphos

Checks

Buyer due diligence

Title, developer mortgages and permits.

Explore

Paphos rooftops and harbour at golden hour with construction cranes on the skyline

Market

Paphos property market update

Prices, sales and supply in 2026.

Explore

Laptop and coffee on a shaded terrace overlooking the Paphos coast

Tax

Non-dom status

How non-dom interacts with investment income.

Explore

€300,000

Minimum for PR by investment

Plus VAT, first sale from a developer

~4%

Gross rental yield, Paphos

Tier-2 market estimate

+9.6%

Paphos prices, year to Q2 2026

Central Bank of Cyprus

20%

Capital gains tax on Cyprus property

Is Cyprus property investment worth it in 2026?

For capital growth, the recent numbers are strong. The Central Bank of Cyprus index shows Paphos prices up 9.6% in the year to Q2 2026, and Land Registry data show 2,654 sale contracts in Paphos from January to August 2026, up almost 20%.

The growth is in flats. In Q2 2026 the central bank's Paphos apartment index was up 18.5% on a year earlier, while Paphos houses rose just 3.1%. If you are buying to invest, that gap matters more than the headline figure.

A low-rise apartment complex with a shared pool and palm trees in Paphos — Low-rise complexes with a shared pool are common around Paphos

For income, the picture is more modest. Market data put gross yields in Paphos at around 4%, below Limassol's roughly 6%. That is before communal fees, repairs, empty months, letting fees and tax.

Supply is also rising. Cyprus issued permits for 8,978 residential units in the first five months of 2026, 63.7% more than a year earlier. More new flats in two or three years' time means more competition for tenants.

The bottom line: Paphos works best as a home that also holds its value, or as part of a residency plan. As a pure yield play, run the numbers net of costs before you believe any brochure.

Cyprus property investment for permanent residency

The fast-track immigration permit under Regulation 6(2) gives permanent residency to non-EU investors, including UK citizens. The Migration Department's conditions for the property route:

Invest at least €300,000 in a new house or apartment bought from a development company as a first sale. VAT is on top, and the payment receipts must reach €300,000 excluding VAT.
You may buy up to two homes if together they reach €300,000.
Show secure annual income from abroad of at least €50,000, plus €15,000 for a spouse and €10,000 per dependent child.
The money must come from abroad, from your or your spouse's account.
Application fee €500, plus €70 per person for the alien registration certificate. The department aims to decide in about 2 months.

From 1 September 2026, applications also need medical tests, including a chest X-ray and blood tests.

The permit lapses if you sell the property without replacing it, or if you spend two years outside Cyprus. Check whether you qualify with our permanent residency readiness tool. The full process is in our PR investment route guide, and the property conditions are in property requirements for PR.

The four investment categories for PR

Category	What you buy	Resale allowed?
A	House or apartment from a developer, €300,000+ plus VAT	No, first sale only
B	Offices, shops, hotels or similar, €300,000 in total	Yes
C	€300,000 in a Cyprus company with at least 5 employees	n/a
D	€300,000 in Cyprus investment fund units	n/a

Source: Migration Department, immigration permits for investors (4th revision, in force from 2 May 2023).

The real cash cost of the €300,000 PR route

One applicant buying one new home at exactly €300,000 plus VAT. Legal fees at 1% to 1.5% plus 19% VAT.

Cost	Main home, qualifies for 5% VAT	Not your main home (19% VAT)
Property (minimum, excluding VAT)	€300,000	€300,000
VAT	€15,000	€57,000
Transfer fee	€0 (VAT sale)	€0 (VAT sale)
Legal fees incl. VAT	€3,570 to €5,355	€3,570 to €5,355
PR application and registration	€570	€570
Total	About €319,100 to €320,900	About €361,100 to €362,900

Our calculation from the Migration Department fees (€500 application, €70 registration), the 5% VAT limits (home worth up to €350,000, first 130 m²) and typical legal fee quotes. The 5% rate needs the home to be your main residence, so most investors who stay UK-based pay 19%.

Rental yields in Paphos

Gross yield is a year's rent divided by the price. Market data from a Cyprus property portal put Paphos at about 4% in 2026, against roughly 6% in Limassol and 5% in Nicosia.

Low-rise seafront apartments in Kato Paphos in early morning — Seafront apartments in Kato Paphos

A worked example, using our own assumptions rather than market averages:

	Figure
Purchase price	€250,000
Rent	€1,000 a month, 12 months let
Gross rent	€12,000
Gross yield	4.8%
Less communal fees, repairs, insurance, one empty month	Varies; budget at least 15% to 20% of rent
Net yield before tax	Roughly 3.8% to 4.1%

For context, a 2-bed apartment in Paphos lets for about €1,000 to €1,500 a month in 2026 on long-term contracts. Furnished 1 and 2-bed flats in Kato Paphos and Universal have seen the fastest rent rises.

Where yields look higher, they are usually short-term holiday lets quoted before costs and before the quiet winter months.

Myth

Myth: 'Paphos rentals yield 6% to 10%'

Reality

Those numbers are usually gross holiday-let takings in peak months, before cleaning, management, winter voids and tax. Market data for 2026 put Paphos long-term gross yields at about 4%. A €250,000 flat would need to let for over €1,250 a month, every month, to reach 6% gross. Ask any agent quoting more to show you a full year of actual rent receipts.

Tax on Cyprus rental income

If you are Cyprus tax resident, rental income is added to your other income and taxed under the 2026 bands:

Taxable income	Rate
Up to €22,000	0%
€22,001 to €32,000	20%
€32,001 to €42,000	25%
€42,001 to €72,000	30%
Over €72,000	35%

House keys on a wooden table in a bright, empty living room in Paphos — Keys should change hands only after the checks are done

You deduct 20% of gross rent as a deemed expense (or actual costs if higher), plus loan interest. Special Defence Contribution on rent was abolished from 1 January 2026, but the 2.65% GeSY contribution still applies to rental income.

From 1 July 2026 tenants must pay all rent electronically, which also means every euro of rent is traceable.

If you stay UK tax resident, HMRC taxes your worldwide income, including Cyprus rent, with credit for Cyprus tax under the UK-Cyprus double tax treaty. See our UK to Cyprus tax guide and talk to an adviser before you buy.

Capital gains tax when you sell

Cyprus charges 20% capital gains tax on gains from Cyprus property, whether or not you live here. For disposals from 1 January 2026, the lifetime exemptions went up:

€30,000 general exemption (was €17,086)
€150,000 for your main residence (was €85,430), reported as needing at least 5 years of occupation
€50,000 for agricultural land sold by farmers

These are lifetime totals, not per sale. Selling costs such as agent commission reduce the gain.

The reform also cut the threshold for CGT on shares in property-rich companies from over 50% to 20% of company value coming from Cyprus property. If you were planning to hold through a company and sell the shares, check this first.

Property brief

Send your investment property brief

Tell us your budget, the areas and whether the purchase must qualify for permanent residency. I'll reply with the next step and, if you want, introduce a vetted independent lawyer who handles PR-compliant purchases.

No sales commission, no developer ties
PR-compliant purchase checks
Free introduction; fees quoted up front

Founder-led. Replies within one working day.

Buying through a company

Cyprus corporation tax is 15% from 2026. Holding a rental through a company can make sense for larger portfolios, but it adds accounting costs and does not get a UK buyer round Cap. 109: companies controlled by non-EU nationals need the same District Administration permission.

For PR, the Migration Department accepts a purchase in a company's name if you and your spouse are the only shareholders. The 2026 bill on foreign buyers also aims to close the route some buyers used to hold more than two units through companies.

Get tax advice on both sides before you choose a structure. Our tax advisers directory explains what to ask, and the Paphos property hub covers buying, renting and the market.

Borrowing to invest? The Central Bank of Cyprus caps loans on any property that isn't your main home at 70% of its value, and the average rate on new housing loans was 3.23% in June 2026. At 4% gross yield, borrowing at 3.23% leaves little margin once costs are paid.

Short-term or long-term lets?

Long-term lets give steady income with little management: a 12-month contract, a deposit and one tenant. Tenants on contractual tenancies have firm rights, so choose them carefully.

Villas on the cliffs near the Sea Caves at Peyia at sunset — Villas above the Sea Caves near Peyia

Holiday lets can earn more per night in Kato Paphos and Coral Bay from May to October, but they need registration with the Deputy Ministry of Tourism, cleaning and changeovers, a manager if you live in the UK, and they sit empty for much of the winter. Check your complex's rules too: some ban holiday letting.

One more thing to price in: getting a non-paying tenant out is slow. In February 2026 Cyprus Mail reported a landlord whose tenant had paid nothing for four years, with the eviction case postponed at least eight times. Vet tenants, take a proper deposit and use a written contract.

If you don't live in Paphos full time, I'd lean towards long-term tenants. The numbers are lower, but so is the stress.

Which Paphos investment fits your goal?

Your goal	What to buy	Where to look	The catch
Permanent residency	New home from a developer, €300,000+ plus VAT	Anywhere in Paphos district	19% VAT unless it is your main home; developer checks essential
Long-term rental income	Resale 1 or 2-bed apartment	Universal, Kato Paphos, near schools and the hospital	About 4% gross; tenants' rights are strong
Holiday lets	Apartment with pool access	Kato Paphos, Coral Bay	Tourism registration, managers, empty winters, complex rules
Capital growth	Apartments rather than houses	Town and coast	Past growth (apartments +18.5% in the year to Q2 2026) is no promise
A future home you let for now	What you would live in yourself	The area you plan to retire to	Rent there first; you can't claim 5% VAT until it's your main home

A villa pool and terrace near Peyia at sunset with the sea beyond

Paphos property as an investment

What works

Prices up 9.6% in the year to Q2 2026 (Central Bank of Cyprus)

Strong foreign demand: about 7 in 10 Paphos contracts in 2026 involve foreign buyers

Route to permanent residency above €300,000 plus VAT

No annual property tax, no stamp duty, and higher CGT exemptions from 2026

Paphos is cheaper to buy into than Limassol

What to watch

Gross yields around 4%, lower than Limassol

New-build supply rising fast (permits up 63.7% in early 2026)

19% VAT on new-builds for non-residents is a sunk cost

Title deed delays on some developments

Non-EU buyers limited to two units, with tighter rules proposed

An investor's roadmap

Decide the goal

Residency, rent, growth or a future home. It decides new-build versus resale.

Get tax advice

UK and Cyprus residence status, structure, and how rent and gains will be taxed.

Instruct a lawyer

Before you reserve. They check PR eligibility and Cap. 109 limits.

Run the numbers net

VAT or transfer fees, legal fees, communal fees, voids and tax.

Due diligence

Search certificate, permits, developer record. See the property due diligence checklist.

Buy and let

Registered agent, written tenancy, rent paid electronically.

A villa terrace with a pool among olive trees at Tsada above Paphos — Tsada, in the hills above Paphos

Cyprus property investment questions

For capital growth, recent data are strong: Paphos prices rose 9.6% in the year to Q2 2026. For rental income, gross yields in Paphos are around 4%, which leaves a modest net return after costs and tax.

Serious about buying?

Have the property and the plan checked first

An independent lawyer checks title, permits and PR eligibility before you commit a euro.

Get a due diligence introduction Help me find a property

Sources checked for this page

1.Migration Department: Immigration permits for investorsGovernment
2.Migration Department: Immigration permits for investors (medical tests from 1 Sept 2026)Government
3.Ministry of Interior: Purchasing property (Cap. 109)Government
4.Central Bank of Cyprus: Residential property price indicesGovernment
5.PwC Tax Summaries: Cyprus taxes on personal incomeProfessional
6.KPMG Cyprus: Tax residency and non-dom rules 2026 (SDC on rent abolished)Professional
7.Chambers & Co: Cyprus capital gains tax 2026 exemptionsProfessional
8.DevelopersCyprus: Cyprus property investment 2026 (yields by city)Professional
9.Cyprus Property News: 2026 property tax reformsExperience
10.Cyprus Mail: CBC price index and building permits, Q2 2026Experience
11.ESRB: Central Bank of Cyprus LTV notificationGovernment
12.Cyprus Mail: Buying property in Cyprus, a familiar tale of woe (Feb 2026)Experience

Written by

Jason

Founder, Paphos Advisor

British founder who moved his family from the UK to Paphos in 2025. I write down what I learned doing it properly — the tax, the residency and the living-here detail — and introduce people to the specialists I’d use myself.

How I research and fact-check

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