If you own or rent property in Cyprus, there is a new rent payment law that changes how rental transactions must be conducted starting July 1, 2026 and this just might affect you.
New Law Starting July 1, 2026
The Cyprus Tax Department has announced that any beneficiary of all rent relating to immovable property in Cyprus must be settled through traceable, electronic channels only. This means cash is no longer accepted. The only acceptable payment methods are via bank transfers, debit or credit card payments, and any other approved electronic means of payment. This new law applies to all individuals and legal entities, regardless of the rental amount or the type of property used whether that be residential or commercial.
Why is This Change Happening?
The move is part of Cyprus’s broader 2026 tax reform. It is one of the most comprehensive overhauls of the country’s tax framework in over two decades. This change creates transparency by requiring traceable payments, the Tax Department will then look to be able to reduce undeclared rental income and bring Cyprus in line with EU standards for financial accountability. In addition to the new rent payment law, the reform has also completely gotten rid of the Special Defence Contribution (SDC) on rental income, meaning landlords are now taxed under the standard Income Tax regime only which then simplifies what was previously a dual-taxation system.
What are Next Steps for Landlords and Tenants?
If you have existing rental agreements that include cash payment arrangements, now is the time to update them. Landlords should notify tenants in writing, revise contract terms where necessary, and ensure banking or card payment infrastructure is in place well before the July deadline. Tenants should confirm their payment methods comply and keep digital records of all transactions. Rent payments that do not meet the electronic payment requirement may be disallowed as a tax-deductible expense for the payer. For businesses leasing property, this could result in additional tax exposure. Landlords who continue to accept cash after July 1, 2026 are also in breach of the rent payment law.
At David Spyrou Group, we help property owners and investors navigate Cyprus’s ever-changing real estate market from rental compliance to your real estate investment strategy. Get in touch with our team for expert advice tailored to your situation.