As from the 1st August 1980, Capital Gains Tax is levied at the rate of 20% on gains realised from the disposition of immovable property, including gains from the disposition of shares in private companies which own immovable property.
The following categories of dispositions are exempted from Capital Gains Tax:
(a) Transfers by reason of death.
(b) Donations between relatives up to the third degree of kindred.
(c) Donations to limited companies all the shareholders of which are members, and continue for 5 years after the donation to be members, of the family of the donor.
(d) Donations from family companies to their shareholders.
(e) Donations to Charitable Institutions or to the Republic of Cyprus.
(f) Exchanges of immovable properties.
(g) Compulsory acquisitions.
In assessing the gain there must be deducted from the price received in consideration of the disposition:
(a) the assessed market value of the property as at 1st August 1980, or
(b) the price paid or the consideration given for the acquisition of the property, if the property was acquired after 1/8/80.
(c) the subsequent increase of the value of the property due to inflation, which is calculated in accordance with the Retail Price Index, issued every month by the Statistics Department.
(d) in sales of agricultural land by farmers, the first CY£15.000 of the purchase price, provided that the farmer was residing in the same area at the time of the sale.
(e) in sales of property used as a residence by the vendor, the first CY£50.000 of the purchase price, provided that he has been using the same as his residence for at least 10 years prior to the sale.
(f) for all other sales, the first CY£10.000 of the purchase price.
Those deductions are granted only once, unless they have not been exhausted at the first sale, in which case any balance would be carried forward.
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