Living in Cyprus as an Expat: 60-Day Rule, Non-Dom Status and Property

Cyprus is one of Europe's most sophisticated tax planning jurisdictions and a popular choice for British expats, HNW individuals, and international entrepreneurs. Its combination of EU membership, English as a widely spoken language, a common law legal system with English law influence, a competitive corporate tax rate of 15% (raised from 12.5% on 1 January 2026 in line with the OECD global minimum), and the non-domicile exemption on investment income make it uniquely attractive among EU member states.

As of 2026, Cyprus is home to a thriving expat community — particularly British nationals (approximately 65,000 registered) and significant communities of Russians, Israelis, Lebanese, and South Africans who value its stability and tax environment. The island has also become the European hub for technology companies, shipping businesses, and international wealth management structures.

Cyprus Tax Residency: Two Routes

Cyprus offers two routes to tax residency — the standard 183-day rule and the "60-day rule" introduced in 2017.

The Standard 183-Day Rule

Any individual who spends more than 183 days in Cyprus in a calendar year is a Cypriot tax resident. This is the standard rule applying in most countries.

The 60-Day Rule

The 60-day rule was introduced to attract internationally mobile individuals who cannot commit to spending more than six months in any single country. Under this rule, an individual can become a Cyprus tax resident by spending at least 60 days in Cyprus in a tax year, provided they:

1. Are not resident in any other country for more than 183 days in the same year
2. Are not tax resident in any other country
3. Carry out a business activity in Cyprus, are employed in Cyprus, or hold a position as director of a company that is tax-resident in Cyprus
4. Maintain a permanent home in Cyprus (owned or rented)

This is a powerful tool for internationally mobile entrepreneurs and business owners who move between multiple countries. By incorporating a Cypriot company, taking up a directorship, and spending as few as 60 days in Cyprus, they can establish legitimate Cypriot tax residency.

Important caveat: The 60-day rule does not mean you can spend only 60 days in Cyprus while being genuinely resident elsewhere. Tax residency is about your actual circumstances and where your centre of vital interests is located. HMRC and other tax authorities scrutinise tax residency claims carefully, and artificial arrangements are at risk of challenge.

Non-Domicile Status in Cyprus

Separate from tax residency, Cyprus offers a significant benefit to individuals who are tax-resident in Cyprus but not domiciled in Cyprus: exemption from SDC (Special Defence Contribution) tax on dividends and interest income.

SDC is a tax unique to Cyprus that applies to:

• Dividends: at 5% for Cyprus-domiciled individuals (reduced from 17% under the 2026 tax reform, effective 1 January 2026)
• Interest income: at 17% for Cyprus-domiciled individuals
• Rental income: SDC on rental income was abolished under the 2026 tax reform

However, non-domiciled Cyprus tax residents are completely exempt from SDC on dividends and interest income — for 17 years from the year they first become Cyprus tax resident, as long as they do not become Cyprus-domiciled. (The 2026 reform allows the period to be extended in two further five-year tranches, each requiring a lump-sum payment.)

Domicile in Cyprus has two categories:

• Domicile of origin: Determined by place of birth/father's domicile — British nationals have a UK domicile of origin and are therefore non-domiciled in Cyprus by default
• Domicile of choice: Can be acquired by residing in Cyprus with the intention to remain permanently — generally not relevant for most expats who intend to maintain connections elsewhere

Practical result: A British national who becomes a Cyprus tax resident (via the 183-day or 60-day rule) and holds shares in a Cypriot or international company can receive dividends completely free of Cyprus tax — no dividend tax at all — because they are non-domiciled.

Similarly, interest income from bank accounts, bonds, or loans is not subject to Cyprus SDC.

Combined with the 15% corporate tax rate at company level, this creates a highly efficient structure for business owners and investors.

Cyprus Personal Income Tax

Standard Cyprus income tax applies at progressive rates (revised under the 2026 tax reform):

• €0–22,000: 0%
• €22,001–32,000: 20%
• €32,001–42,000: 25%
• €42,001–72,000: 30%
• Above €72,000: 35%

Employment income from Cyprus is subject to these rates, less Social Insurance contributions (8.8% employee contribution on gross salary, capped at €68,904 of annual insurable earnings for 2026).

CGT (Capital Gains Tax) in Cyprus applies only to gains on immoveable property located in Cyprus (and gains on shares of companies holding Cyprus immoveable property). The rate is 20%. All other capital gains — from shares, bonds, overseas property — are entirely exempt from Cyprus tax. This is a significant advantage for investors with globally diversified portfolios.

The Cyprus Non-Dom Structure in Practice

A typical planning arrangement for an internationally mobile entrepreneur using Cyprus:

1. Cyprus holding company with a 15% corporate tax rate on profits
2. Individual holds shares in the Cyprus company and is employed as director
3. Individual is Cyprus tax resident under the 60-day or 183-day rule
4. Dividends paid from company to individual are exempt from SDC (15% corporate tax already paid at company level; dividends exempt from SDC at individual level due to non-dom status, though a 2.65% General Healthcare System contribution applies)
5. Capital gains from selling shares in the Cyprus company are exempt (unless the underlying assets are Cyprus land)
6. No Cyprus withholding tax on dividends paid by Cyprus companies to non-residents

The effective combined tax rate on business profits extracted as dividends can therefore be as low as around 15% (plus the 2.65% GHS contribution on the dividend) — competitive with any jurisdiction globally.

Cyprus Property Market

Cyprus property has been on a strong recovery trajectory since the 2012–2013 banking crisis, driven by domestic demand, the UK expat community, Israeli and Russian buyers, and the now-closed Citizenship by Investment programme (which ended in 2020 following controversy).

As of 2026, indicative prices:

• Limassol (the business hub): €2,500–8,000+/sqm for prime apartments; significant premium for sea views
• Paphos (popular with UK retirees): €1,500–3,500/sqm
• Larnaca (growing business district): €1,500–3,000/sqm
• Nicosia (capital, inland): €1,200–3,000/sqm
• Ayia Napa and Cape Greco coast: €2,000–6,000/sqm for new developments

Purchase costs:

• VAT: 19% on new builds from developers (a reduced 5% rate applies on the first 130sqm for primary residences, subject to conditions and value limits); resale properties are subject to Transfer Tax rather than VAT
• Transfer Tax: 3–8% of property value (with exemptions in some cases)
• Stamp Duty: 0.15–0.2% on the value above €5,000
• Legal fees: typically 1–2%

Annual property costs:

• Immoveable Property Tax was abolished in 2017 — Cyprus is one of the few countries with no annual property tax
• Local authority levies (refuse, lighting): small annual amounts
• Community/maintenance fees for apartments

Banking in Cyprus

The Cypriot banking sector underwent significant restructuring following the 2012–2013 crisis and the "haircut" on uninsured deposits in 2013. Today, the main banks are Bank of Cyprus, Hellenic Bank, and Alpha Bank Cyprus — all subject to EU banking regulation and significantly stronger capital positions than in 2013.

International private banks have a significant presence in Cyprus, particularly in Limassol. Many HNW expats and non-doms use Cyprus as a banking centre alongside offshore accounts in Jersey, Guernsey, or the Isle of Man.

Opening a bank account in Cyprus as an expat requires proof of residency, ID, and increasingly thorough AML/KYC documentation. Cyprus has been subject to EU and international scrutiny on anti-money laundering, and banks are diligent in their due diligence.

Healthcare in Cyprus

Cyprus has a public healthcare system (GESY — General Health System) launched in 2020. EU and EEA nationals, and holders of long-term residency, can access GESY upon registration and payment of a small annual contribution. The quality of GESY has improved significantly since launch, though waiting times for specialist appointments can be lengthy.

Private healthcare in Cyprus is of good quality, particularly in Limassol and Nicosia, where many internationally trained doctors practise. Private health insurance from an international insurer is recommended for those who want guaranteed access to private facilities.

Estate Planning in Cyprus

Cyprus applies the EU Succession Regulation 650/2012, allowing non-Cypriot EU nationals to elect their home country's law to govern their estate. British nationals (as non-EU nationals post-Brexit) cannot rely on this, but Cyprus law permits testamentary freedom for immoveable property in Cyprus to a reasonable degree.

Forced heirship rules exist in Cyprus for immoveable property — spouses and children have certain protected rights. A qualified Cypriot lawyer should draft any will covering Cyprus property.

There is no inheritance tax in Cyprus — assets passing on death are not subject to any Cypriot death duties. This is a significant attraction compared to the UK's 40% IHT.

Financial Planning Checklist for Cyprus Expats

1. Confirm tax residency route (183-day or 60-day) with a Cypriot tax adviser
2. Confirm non-domicile status and its implications for SDC
3. If using the 60-day rule, establish a Cyprus company and take up a directorship
4. Obtain a Cyprus Tax Identification Code (TIC) and register with the Tax Department
5. Notify HMRC of UK departure
6. Open a Cyprus bank account — allow time for KYC process
7. Review corporate structure for business owners
8. Review pension and investment arrangements
9. Draft a Cyprus will covering Cyprus immoveable property
10. Arrange health insurance and register with GESY if appropriate

Compliance Reminder

Cyprus tax law, company law, and banking regulations are subject to change. EU directives and OECD standards affect Cyprus constantly. The 60-day rule is subject to conditions that must be met genuinely — it is not a mechanical procedure to manufacture tax residency. This guide reflects the position as of 2026. Professional advice is essential. Investments and property values can fall as well as rise.

How Global Investments Can Help

Global Investments is an independent international advisory firm with deep expertise in advising clients who use Cyprus as their financial base. We provide holistic financial planning, corporate structuring guidance, pension advice, cross-border estate planning, and investment management for Cyprus-resident expats and non-doms. Contact us for a confidential consultation with our Limassol or Nicosia team.