New Incentives for Landlords
Cyprus has introduced new tax breaks to encourage affordable rentals under the “Renovate-Rent” programme. The initiative, led by the Interior Ministry, aims to increase affordable housing while providing financial benefits to landlords.
Tax Benefits for Landlords
The proposed laws, presented to parliament on Thursday, grant landlords:
- Three-year exemption from income tax, corporate tax, and defence contributions on rental income from affordable leases.
- Enhanced capital allowances of up to 20% for eligible properties.
To qualify, landlords must lease properties at least 30% below market rates. The Interior Ministry will publish rental price guidelines by district, municipality, and property type.
Higher Capital Allowances
The legislation also increases capital allowances:
- Buildings: From 3% to 5%
- Machinery & equipment: From 10% to 15%
These incentives apply to purchases made between 2024 and 2027 and are available to both individuals and companies.
Government Spending on Tax Exemptions
The tax breaks under Cyprus Offers Tax Breaks for Rentals will cost the government €1.75 million annually or €5.25 million over three years. Additionally, an amendment to the Special Defence Contribution Law will remove the 3% defence levy on rental income for eligible properties, costing €100,000 per year or €300,000 over three years.
Tenant Eligibility Criteria
To rent under this scheme, tenants must meet income limits and cannot be related to the landlord. The income thresholds are:
- Single individuals: €25,000
- Couples or single-parent families (2 members): €45,000
- Families with 3 members: €50,000
- Families with 4 members: €55,000
- Families with 5+ members: €65,000
Boosting Affordable Housing
The Cyprus Offers Tax Breaks for Rentals initiative seeks to increase affordable housing while providing landlords with financial incentives. By combining tax relief with clear eligibility criteria, the programme aims to create a fair and sustainable solution for both landlords and tenants.
Discover more property news and home advice by reading our other blogs on Properush.
Source: Cyprus Property News
