From mandatory electronic rent payments to lower taxes for landlords and new rules for holiday lets, 2026 has changed the way renting works in Cyprus. Here’s a clear guide to what’s new and what’s being discussed.
Whether you own a property you rent out, plan to buy one as an investment, or rent your home, 2026 has brought some of the biggest changes to Cyprus’s rental market in years. Most of them are good news. Rental income is now taxed less, tenants can claim new tax deductions, and the market is becoming more transparent.
Here’s what you need to know.
1. Rent must now be paid electronically
From 1 July 2026, all rent for property in Cyprus must be paid electronically. That means by:
• bank transfer
• debit or credit card
• another recognised electronic payment method
Cash payments are no longer allowed. The rule applies to everyone: individuals and companies, residential and commercial properties, and any amount of rent. Landlords are not allowed to accept rent in any other way.
What this means for you
• Landlords: Make sure your tenants have your correct bank details, and update your tenancy agreements to show the approved payment method.
• Tenants: Pay by transfer or card and keep your payment confirmations. You’ll need them if you want to claim the new tax deduction (see below), and they protect you in case of any dispute.
The goal is to make the rental market more transparent and ensure that rental income is properly declared.
2. Lower taxes for landlords
Cyprus’s major tax reform, which took effect on 1 January 2026, brought good news for property owners:
• No more Special Defence Contribution on rent: Landlords used to pay an extra 3% contribution on 75% of their rental income (an effective 2.25%) on top of income tax. This has been abolished, so rental income is now subject only to income tax for individuals, or corporate tax for companies.
• A higher tax-free threshold: The tax-free allowance for individuals has risen from €19,500 to €22,000 a year, with new tax bands above that:
| Annual income | Tax rate |
|---|---|
| Up to €22,000 | 0% |
| €22,001–€32,000 | 20% |
| €32,001–€42,000 | 25% |
| €42,001–€72,000 | 30% |
| Over €72,000 | 35% |
Up to €22,000
- Tax rate
- 0%
€22,001–€32,000
- Tax rate
- 20%
€32,001–€42,000
- Tax rate
- 25%
€42,001–€72,000
- Tax rate
- 30%
Over €72,000
- Tax rate
- 35%
• No more stamp duty: Stamp duty has been fully abolished, including on tenancy agreements, which makes signing a lease simpler and cheaper.
Rental income is still subject to the national health system (GHS) contribution, and every landlord should declare their rental income in their annual tax return.
3. A new tax deduction for tenants
For the first time, tenants can claim a tax deduction of up to €2,000 a year for rent paid on their main home in Cyprus. The same deduction can be used for mortgage interest by homeowners.
To qualify:
• the property must be your main residence
• your family income must be within the limits: up to €100,000 for families with up to two children, €150,000 with three or four children, and €200,000 with five or more
• your rent must be paid electronically
This makes renting more affordable for many households and gives tenants another good reason to pay by transfer.
4. Short-term and holiday rentals: stricter rules
If you rent your property to holidaymakers through Airbnb, Booking.com or similar platforms, the rules are tightening.
What applies now
• Every short-term rental must be registered with the Cyprus Deputy Ministry of Tourism before it’s advertised or rented. Once registered, you receive a registration number that must appear on every listing.
• A new EU regulation, in force since 20 May 2026, requires platforms such as Airbnb and Booking.com to check registration numbers, remove listings without a valid number, and share data with the authorities.
What’s coming
After a 2026 Audit Office report found thousands of listings without valid registration and gaps in safety checks, the Deputy Ministry of Tourism is drafting new legislation to tighten registration requirements and strengthen property inspections. The details haven’t been published yet, but the direction is clear: stronger checks and stricter enforcement.
Our advice: If you rent short-term, make sure your property is properly registered, safe and compliant. Unregistered listings are increasingly likely to be removed and penalised.
5. Rent increases: current rules and proposed changes
Today’s rules
Most residential leases in Cyprus are governed by the tenancy agreement between landlord and tenant, so rent increases depend on what the contract says.
A smaller number of properties fall under the Rent Control Law. For these, rent can only be increased once every two years, and the maximum increase is currently 6% for the period from 22 April 2025 to 21 April 2027.
What’s being discussed
In July 2026, a bill was submitted to Parliament that would extend similar protections to all main residences. Under the proposal:
• rent could only be increased once every 24 months
• the increase couldn’t exceed 6% over that period
• landlords would need to give tenants at least 60 days’ written notice
• hidden fees and clauses where tenants waive their rights would be banned
The bill is still being reviewed by a parliamentary committee and isn’t law yet. Landlord groups have opposed it, arguing that the real problem is a shortage of housing, not rental pricing, and that more homes need to be built. We’ll keep you updated as the discussion develops.
What this means for you
If you’re a landlord or investor
• Lower taxes make rental income in Cyprus more attractive than before.
• Make sure all rent is received electronically, and update your agreements.
• If you rent short-term, check that your registration is valid and up to date.
• Keep an eye on the proposed rent increase rules when planning long-term returns.
If you’re a tenant
• Pay your rent electronically and keep your records.
• Check whether you qualify for the new €2,000 tax deduction.
• Read your tenancy agreement carefully, especially the terms on rent increases.
Let us take care of your rental property
With new rules on payments, taxes and registrations, managing a rental property in Cyprus takes more care than ever. Contact us, and the MENO Properties team will help you manage your property with confidence. From finding reliable tenants and handling rent collection to keeping your property compliant and well maintained, we’ll make sure your investment works for you, without the stress.
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