Estate Tax in Cyprus in 2025

As of 2025, Cyprus remains one of the most attractive destinations in Europe for individuals and families seeking favorable tax conditions for estate planning. This is primarily due to the absence of an estate or inheritance tax. Since its abolition on January 1, 2000, Cyprus has maintained its position as a tax-friendly jurisdiction for passing on wealth to heirs.

No Estate or Inheritance Tax

Cyprus does not impose any estate or inheritance tax on the transfer of assets upon an individual’s death. This policy benefits families and heirs by eliminating the need to pay taxes on inherited wealth, whether it involves real estate, financial assets, or personal belongings. The absence of such taxes has been a significant factor in attracting foreign nationals to establish residency and invest in Cyprus.

Transfer Fees for Real Estate Inheritance

While Cyprus does not levy an estate or inheritance tax, beneficiaries inheriting real estate are required to pay transfer fees to the Land Registry. These fees are determined based on the property’s value and the relationship between the deceased and the beneficiary. The applicable rates are as follows:

• Relationship-Based Rates:

  • 4% for transfers from parents to children

  • 8% for transfers between spouses or third-degree relatives

• Value-Based Rates:

  • 3% on the first €85,000 of the property’s value

  • 5% on the portion between €85,000 and €170,000

  • 8% on any amount exceeding €170,000

For example, if a parent bequeaths a property valued at €200,000 to their child, the transfer fees would be calculated as follows:

• 3% on the first €85,000: €85,000 × 3% = €2,550

• 5% on the next €85,000: €85,000 × 5% = €4,250

• 8% on the remaining €30,000: €30,000 × 8% = €2,400

Total Transfer Fee: €2,550 + €4,250 + €2,400 = €9,200

Compliance and Administrative Requirements

While Cyprus offers significant tax advantages, there are administrative requirements that must be adhered to during the inheritance process. The estate administrator is required to submit a detailed statement of the deceased’s assets and liabilities to the tax authorities within six months of their passing. This ensures proper compliance with local regulations and facilitates the smooth transfer of assets to beneficiaries.

Additional Considerations

Although there is no estate or inheritance tax, other taxes may apply depending on the specific circumstances. For instance:

• Capital Gains Tax: Applicable if the beneficiary sells inherited real estate and realizes a profit.

• Income Tax: May apply if the inherited assets generate income, such as rental properties or dividends.

• Property Taxes: Beneficiaries may be liable for annual property taxes on inherited real estate.

Conclusion

The absence of an estate or inheritance tax in Cyprus, combined with its relatively low transfer fees for real estate inheritance, makes the country an ideal destination for estate planning. However, it is essential for individuals to seek professional advice to ensure compliance with local laws and optimize their financial strategies. By understanding the tax landscape and administrative requirements, families can effectively manage the transfer of wealth across generations in Cyprus.