Key changes include:

Companies

• The corporate tax will increase from 12.5% to 15% in line with OECD standards 
• The carry-forward period for tax losses will be extended to 7 years, up from previously 5 years.

Companies will continue to enjoy 0% capital gains tax on sale of securities. As a result, the increase in corporation tax will only effect companies with taxable income, such as interest income, rental income and operational income.

Individuals

• The non-dom status may be extended beyond 17 years, for up to two additional five year periods, subject to the payment of a lump sum of EUR 250,000 per period.
• The tax free income treshold for individuals will increase to EUR 22,000 per year.
• All tax residents will be required to file an income tax return regardless of income level.

Under the previous rules, rental income was subject not only to normal income tax but also to SDC, calculated separately. From the implementation of the new reform, rental income is no longer subject to SDC and is taxed only through the standard income tax system.

Rental income is now treated more consistently, without special surcharges. The removal of SDC also reduces the overall tax burden associated with property ownership and investment.

This reform supports a more transparent and predictable tax environment. By eliminating SDC on rent, Cyprus improves its attractiveness to both local and international property investors while encouraging long-term investment in the housing market.

The abolition of SDC on rental income is a positive reform that simplifies taxation, reduces complexity, and reflects a more modern approach to property income in Cyprus.