Updated: August 2026
Rental Income Tax in Cyprus
Big change for 2026: SDC on rental income has been abolished. Here's how rental income is taxed now.
SDC on Rental Income — Abolished from 2026
Previously, rental income was subject to SDC at 3% (on 75% of gross rental income). This has been completely abolished. From 2026, rental income is only subject to regular income tax at the progressive rates (0%-35%).
How Rental Income Is Taxed Now
Rental income is added to your other taxable income and taxed at the standard progressive income tax rates (0%-35%). You can deduct:
- • Mortgage interest (if applicable)
- • Repairs and maintenance
- • Property management fees
- • Insurance premiums
- • Municipal taxes and sewerage fees
- • 20% capital allowances on the building cost (not land)
Example
Annual rental income: €12,000
Deductible expenses: €3,000
Net rental income: €9,000
If your other income is €35,000, total taxable income = €44,000.
Tax on €44,000 = €5,100 (using progressive bands).
No SDC applies.