Cyprus tax reform reshapes land-for-development property exchanges

A tax reform came into effect on Cyprus on 1 January that directly affects property exchange schemes.

The principal change concerns capital gains tax legislation. The law now includes a dedicated provision for 'land-for-development' agreements—a popular instrument among developers and landowners. The mechanism works as follows: a property owner transfers their plot to a developer, who constructs a building and returns the finished property, or a portion of it, to the original owner.

The reform has altered the tax regime governing such transactions. This matters for investors: if you are considering exchanging a land plot for a completed apartment or villa, it is essential to understand the new rules to avoid overpaying tax.

If you own a plot on Cyprus or are exploring such development schemes, it would be prudent to consult a tax adviser. The reform only recently came into force, and legal practitioners are still working through the finer points.

Source: Cyprus Mail Property