Cyprus tax reform 2026 brings major updates to rental payments and insurance deductions. From July 2026, cash rents end completely. Landlords gain new tax breaks like €500 home insurance deductions while rental income skips SDC but faces income tax and GHS.
No More Cash Rent Payments from July 2026
Under Cyprus tax reform 2026, all rent collections require bank transfer, debit/credit card, or electronic methods starting July 2026. This combats undeclared “black money” income. See our Larnaca property listings for compliant lease updates.
Cyprus Tax Reform 2026: Rental Income Tax Rules
Rental income avoids Special Defence Contribution (SDC) but owes income tax and GHS (GeSY) contributions.
- Provisional income tax: Pay in two installments – July 31 and December 31 annually.
- GHS self-assessment: Same deadlines unless tenant company withholds it automatically.
Companies must withhold GHS when paying rent. Visit the Cyprus Tax Department for forms.
New €500 Home Insurance Deduction
Owners of any residence – primary homes, holiday properties, rentals – qualify for up to €500 per tax year on premiums paid from January 1, 2026. Covers natural disasters (fire, earthquake, flood).
- No income limits apply.
- Extra coverage like theft still qualifies.
- Counts toward the 1/5 net income cap on insurance deductions.
Cyprus Tax Reform 2026: Life Insurance Deductions
Life insurance premiums stay deductible and now include disability policies (permanent/temporary, total/partial):
- Limit: 7% of insurer’s payout amount.
- Combined life + disability uses single 7% cap.
- Falls under overall 1/5 net income deduction limit.
Partial surrenders taxed:
- Under 4 years: 50% of surrender value.
- 4+ years: 50% excess over prior surrender value.
Full redemptions unchanged:
- Years 1-3: 30% of deducted premiums taxed.
- Years 4-6: 20% taxed.
Action Steps for Landlords
- Switch to electronic rent payments by July 2026 – notify tenants now.
- Insure properties against disasters for €500 deduction on 2026 filings.
- Check life policies for disability coverage and surrender tax risks.
- Mark July 31 and December 31 deadlines for provisional taxes.
Cyprus tax reform 2026 simplifies compliance while rewarding insured properties. Contact Move On Estates for personalized lease and insurance guidance.
Source: Philenews (January, 2026)