CGT is calculated by deducting the cost of purchasing the property (1st January 1980 is the set date) from the sale price and then adding on the effect of the retail price index to the date of sale. It is allowable to deduct genuine expenses and other costs incurred in selling the property.
There are certain CGT exemptions, including in the case of the following:
- The death of the property owner;
- Gifts made from a parent to a child or between spouses;
- Gifts made to charities or the Cypriot Government;
- Where the entire capital gain was used to acquire another property, though CGT liability is merely deferred in this case until the new property has been disposed of.
Where the gain relates to the sale of a principal residence, individuals are allowed EUR85,430 as a deduction from CGT liability calculations (with certain restrictions). Where the property is not a principal residence, the exemption is reduced to EUR17,086. This is a once only lifetime allowance.
This article is an extract from Personal Business Tax Guide , dated 4th January 2011, for the latest version please click here .