Cyprus Non-Dom status exempts a resident’s dividends and interest from the Special Defence Contribution for up to 17 years, yet apartment ownership remains taxable under separate rules. A non-dom landlord pays income tax on net rental profit, 20% Capital Gains Tax when selling an apartment, and local municipal and sewerage charges. In contrast, no annual state property tax applies. Knowing how these charges combine lets an investor align apartment purchases with the non-dom benefit period.
Non-Domicile (Non-Dom) status in Cyprus is a special tax classification for people who are tax residents in Cyprus but are not considered domiciled there under Cypriot law. It gives access to significant tax breaks on certain types of income, primarily dividends and interest.
Non-Dom status applies to individuals who are Cyprus tax residents but either do not have a Cyprus domicile of origin or have not been tax-resident in Cyprus for at least 17 of the last 20 years before the relevant tax year. This means that any foreign nationals who relocate to Cyprus and meet the 60-day or 183-day tax residency rules can qualify as Non-Doms for up to 17 years.
For many relocating individuals, this creates a long but clearly defined planning window during which passive income can be structured to take advantage of SDC exemptions. After the non-dom period ends, their position aligns more closely with that of long-term Cypriot residents for SDC purposes, even though standard income tax rules continue to apply separately.
To obtain non-dom status in Cyprus, a person must satisfy both tax residency conditions and domicile conditions under Cypriot law.
1. Tax residency requirement
To qualify, you must first become a Cyprus tax resident in a given tax year. This can usually be done in one of two ways:
2. Domicile requirement
You must not be treated as domiciled in Cyprus for Special Defence Contribution (SDC) purposes. Broadly, this means either you have a domicile of origin or choice outside Cyprus, or you have not been a tax resident in Cyprus for at least 17 of the last 20 years before the relevant tax year.
3. Practical eligibility checks
Most foreign nationals who relocate to Cyprus, obtain tax residency, and were not long-term Cyprus tax residents in the past will automatically qualify as non-doms upon registration. Specific Cypriot-born individuals may also qualify if they established and maintained a domicile of choice abroad and were non-resident in Cyprus for a sufficiently long continuous period before returning.
For Cyprus non-doms, rental income is now subject to personal income tax only because the 2026 tax reform abolished the Special Defence Contribution (SDC) on rents for all landlords. Gross rent is first reduced by a 20% notional deduction and allowable expenses such as loan interest and repairs, and the remaining profit is taxed under the progressive personal income tax rates that apply to all Cyprus tax residents. Before 2026, domiciled residents paid an effective SDC of 2.25% on rents in Cyprus, while non-doms were exempt. The reform removed that charge for everyone, so domicile no longer changes the SDC position on rental income.
Non-dom landlords remain liable for the General Health System (GeSY) contribution at 2.65% on gross rents, subject to the aggregate income cap of 180,000 euros, and they pay local municipal and sewerage charges tied to the property. Rental income from property located outside Cyprus is generally not taxed in Cyprus, although foreign tax and double tax treaties need to be considered.
Cyprus rental income therefore carries the same income tax treatment for non-doms and domiciled residents after the 2026 reform, with the GeSY contribution the main remaining charge specific to the owner.
Capital gains are not automatically exempt for a non-dom in Cyprus; the key distinction is between gains from immovable property in Cyprus and profits from other assets, such as shares.
Gains from the disposal of immovable property located in Cyprus, or from shares in companies whose value is mainly derived from Cyprus immovable property, are subject to Cyprus Capital Gains Tax (CGT), typically at a flat 20% rate, regardless of whether the seller is a non-dom or domiciled. This means a non-dom selling a Cyprus apartment or shares in a property-holding company can still incur CGT, subject to specific exemptions and allowances, such as main residence relief and other lifetime allowances.
Gains from the sale of shares and other qualifying titles that do not derive their value from Immovable property in Cyprus are specifically exempt from Cyprus tax, for both doms and non-doms. In addition, gains from the sale of immovable property situated outside Cyprus are not subject to Cyprus CGT, although foreign tax rules may still apply.
Cyprus Non-Dom status reduces tax on foreign income by exempting foreign dividends and foreign interest from the Special Defence Contribution (SDC), regardless of whether you bring those funds into Cyprus. Cyprus taxes residents on worldwide income but applies no remittance test, so a Non-Dom can receive overseas dividends and interest and use them freely in Cyprus without triggering SDC.
The advantage is clearest when you set the two resident categories side by side:
| Income type | Cyprus-domiciled resident | Non-Dom resident |
| Foreign dividends | 5% SDC | 0% SDC |
| Foreign interest | 17% SDC | 0% SDC |
One charge still applies to this income. Non-Doms remain liable for the General Health System (GeSY) contribution at 2.65% on gross dividends and interest, capped against an aggregate income ceiling of 180,000 euro, which limits the GeSY cost to 4,770 euro per year across all contributing income. PwC Cyprus confirms this contribution continues to apply to the passive income that SDC no longer touches.
Cyprus Non-Dom status therefore reduces tax on foreign passive income to the GeSY contribution alone for up to 17 years, which is why investors with substantial dividend and interest portfolios relocate their residency to the island.
Remote professionals and investors choose Cyprus Non-Dom status because it pairs near-zero tax on passive income with EU residency, a defined benefit period, and an efficient relocation. Cyprus designed the regime to attract foreign capital and skilled residents, and several features reinforce that purpose.
The following advantages explain the regime’s appeal to this group:
Cyprus Non-Dom status suits entrepreneurs drawing foreign dividends, fund managers, remote-income earners, and retirees with investment portfolios, because a single relocation secures both the tax position and EU residency for nearly two decades.
The 2026 Cyprus tax reform left the Non-Dom regime’s core intact while adding new options and reducing surrounding rates. Parliament enacted the reform on 22 December 2025, and it took effect on 1 January 2026.
For Non-Dom residents, the most relevant changes are:
Two wider changes also affect how much tax a Non-Dom pays on Cyprus-sourced income. The reform raised the tax-free threshold from 19,500 euros to 22,000 euros and revised the progressive bands, so the first 22,000 euros of taxable income now carries no income tax. It also relaxed the 60-day residency rule by removing the condition that you must not be a tax resident of any other state, making it easier for mobile individuals to establish residency in Cyprus.
Cyprus removed its old national Immovable Property Tax, so there is no annual state-level tax for owning a property, whether you are a non-dom or not. Instead, every owner, whether resident or non-resident and whether dom or non-dom, pays various local charges, such as municipal property rates, refuse and other services levies, and sewerage fees, generally based on the property’s 2013 valuation, along with one-off transaction costs like transfer fees, stamp duty, and VAT where applicable.
Under the Cyprus non-dom regime, apartments are subject to ordinary property taxation. The regime’s value sits in SDC exemptions on dividends and interest, not in property-specific reliefs.
Rental income is taxed under personal income tax on net profit. The taxable figure starts with the gross annual rent, minus a 20% notional allowance and allowable expenses, including interest on the acquisition loan, repairs, and qualifying maintenance. The 2026 reform abolished SDC on rents for all landlords, so domicile status no longer affects the calculation. Two charges remain beyond income tax: GeSY at 2.65% on gross rent, capped at the €180,000 aggregate income ceiling, and local municipal and sewerage charges.
On the sale of an apartment in Cyprus, CGT at 20% is charged on the net gain, calculated as the sale price minus indexed acquisition cost and allowable expenses such as improvements, professional fees, and certain transfer costs.
Various lifetime exemptions apply, including a specific allowance for any disposal and a larger relief of up to around 85,430 euros per person where the property has been used as a primary residence for at least five years, which can significantly reduce or eliminate CGT for qualifying owners.
Applying for non-dom status in Cyprus is a two-stage process: first you become a Cyprus tax resident, then you file specific forms and evidence with the Tax Department to claim the non-dom SDC exemption treatment.
Step 1: Obtain Cyprus tax residency
You must register with the Tax Department, obtain a Tax Identification Code (TIC), and meet either the 183-day or the 60-day residency rule, which, under the 60-day route, includes having a permanent home in Cyprus.
Step 2: File the non-dom application
Once tax resident, you complete and submit form T.D.38 together with the relevant questionnaire T.D.38Qa or T.D.38Qb and supporting documents, including ID or passport, evidence of parents’ place of birth, proof of your Cyprus address and overseas address, residence permit, and any foreign tax returns or certificates, to your district tax office. The Tax Department reviews the file and, if satisfied that you are non-Cypriot domiciled and tax resident, issues a confirmation or certificate, which banks and payers then use to stop withholding Special Defence Contribution on your qualifying passive income.
This article is for general informational purposes only and does not constitute legal advice; always consult a qualified professional and verify the latest Cyprus laws before making decisions.
