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Cyprus Rental Income Guide 2026

Rental income in Cyprus is taxed at progressive PAYE rates (0–35%) after deductions. Additionally, a Special Defence Contribution (SDC) of 3% applies to rental income. Landlords benefit from a 20% deemed deduction for wear and tear and can deduct mortgage interest and other expenses.

Rental income taxation in Cyprus involves both the standard income tax (PAYE rates) and SDC. The Tax Department of Cyprus administers both. For related guidance, see our Personal Tax Guide →, Property Tax Guide →, and Investment Income Guide →.

How Rental Income Is Taxed

Rental income from immovable property in Cyprus is subject to two layers of taxation:

  • Income Tax (PAYE rates): Net rental income (after deductions) is added to other income and taxed at progressive rates of 0–35%
  • Special Defence Contribution (SDC): A flat 3% on gross rental income before deductions

The SDC is withheld by the tenant (if the tenant is a business) or paid directly by the landlord through the Taxisnet portal. Non-dom individuals are exempt from SDC on rental income.

Allowable Deductions

  • 20% deemed deduction: A flat 20% of gross rental income is automatically deductible for wear and tear (no receipts required)
  • Mortgage interest: Interest on loans used to acquire or improve the rental property is fully deductible
  • Property repairs and maintenance: Actual costs of repairs (not improvements) are deductible
  • Insurance premiums: Building and contents insurance for the rental property
  • Property management fees: Fees paid to managing agents
  • Municipal rates and common charges: Annual charges paid by the landlord

Corporate Landlords

Companies receiving rental income are taxed at the standard CIT rate of 12.5% on net rental profits. SDC at 3% on rental income also applies to companies (with certain exemptions). Capital gains from the sale of rental properties by companies are subject to CIT at 12.5%, not the 20% CGT rate that applies to individuals.

Filing Requirements

  • Rental income must be declared in the annual personal tax return (deadline: 31 July)
  • SDC on rental income is filed separately via the SDC return (quarterly or annually)
  • Non-resident landlords are taxed only on Cyprus-source rental income
  • Withholding tax may apply to rent paid to non-residents in certain cases

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