Cyprus Real Estate Sales Surge in January Following 2026 Tax Reforms

The property sector in the Republic of Cyprus began 2026 with significant momentum, recording the highest volume of property sales agreements for the month of January since 2008. Official data from the Department of Lands and Surveys confirmed that 1,411 property sales contracts were finalized across the island in January 2026. This volume marks an 11% increase year-over-year compared to the 1,275 transactions completed in January 2025, indicating market resilience amid global economic uncertainty and elevated interest rates.

The immediate driver for this transactional increase appears to be the implementation of comprehensive 2026 tax reforms, which took effect on January 1, 2026. A key component of this legislation is the complete elimination of stamp duty on property-related documentation executed on or after that date, a measure intended to reduce initial acquisition costs for both domestic and international buyers. The reforms also included adjustments to personal income tax allowances, fostering a more favorable fiscal climate for property ownership within Cyprus.

Geographically, sales growth was observed across all districts, though the percentage increases varied. Paphos led in relative growth, registering 318 sales agreements, a 25% rise from the 255 transactions in January 2025. The Famagusta region also reported a substantial gain, with sales climbing 23% to 69 agreements, up from 56 the previous year. Limassol, traditionally the most active market, secured the highest absolute volume with 445 sales contracts, representing a 4% year-on-year increase from 429 sales. Nicosia recorded a more modest 5% growth to 291 sales, while Larnaca achieved an 11% rise to 288 finalized agreements.

Market analysts project a continued upward trend for property valuations through the remainder of 2026, with forecasts suggesting average price increases across the island will settle between 5% and 8% for the full year. This projection is supported by the sustained appeal of the tax incentives and noted constraints in the supply of high-end properties. Furthermore, recent analysis indicates that Paphos may have recently overtaken Limassol in terms of the average sale price for newly constructed homes, largely due to demand for luxury villas in the Paphos district.

The broader 2026 Tax Reform, approved by the Cyprus parliament on December 22, 2025, also introduced significant changes beyond stamp duty, including raising the corporate income tax rate from 12.5% to 15% and increasing the primary residence exemption for Capital Gains Tax to €150,000. The January 2026 figures offer the first concrete evidence of the immediate stimulative effect these fiscal adjustments have had on transactional activity, establishing a strong baseline for the year ahead.