Important News for Rental Property Owners in Cyprus: Take Action Now!

The Cyprus Tax Department has announced a significant change. Starting from 1 July 2026, all rent for immovable property in Cyprus must be paid electronically. This includes methods like bank transfers, debit cards, credit cards, or any other recognized electronic payment method.

Understanding the New Rule

This change is part of a broader tax reform aimed at improving transparency. It will create a clear payment trail and reduce non-compliance in the rental market. The rule applies to all individuals and companies, regardless of the rent amount or property type.

What the Rule States

According to Article 48A of the Assessment and Collection of Taxes Law (L.4/1978), rental income in Cyprus cannot be accepted in cash or through non-electronic methods after the effective date. Landlords and other rent recipients must only accept payments through approved electronic channels.

Acceptable Payment Methods

The following payment methods are acceptable:

• Bank transfer

• Debit card

• Credit card

• Other recognized electronic payment methods

  
  

Who is Affected?

This obligation affects everyone involved in rent payments for immovable property in Cyprus. This includes private landlords, tenants, and companies. Treat this as a mandatory compliance issue, not just an accounting preference.

Key Points of the Rule

The rule applies regardless of:

• Rent amount

• Property type (residential, commercial, etc.)

• Tenant type (individual or company)

  
  

Why This Matters

The primary goal of this rule is traceability. Electronic payments create a clear audit trail. This makes it easier for the Tax Department to verify compliance and for taxpayers to maintain accurate records.

For tenants and businesses, non-compliant rent payments could lead to tax exposure and disallowance issues. For landlords, accepting cash after the deadline could result in compliance problems and potential penalties.

What Landlords Should Do Now

Landlords need to take action before 1 July 2026. Update lease terms, payment instructions, and tenant communications. Confirm the preferred bank account, set up standing orders, and keep clear evidence of all rent receipts.

Recommended Actions for Landlords:

1. Notify tenants in writing.

2. Replace cash instructions with bank details or payment links.

3. Review all tenancy agreements.

4. Keep proof of every rent payment.

5. Align accounting records with the new rule.

   
   

What Tenants Should Do Now

Tenants must ensure their rent payments are set up through an approved electronic channel. Keeping evidence of each payment is crucial, especially for tax deductibility and compliance.

Recommended Actions for Tenants:

• Set up a bank transfer or standing order.

• Keep payment confirmations.

• Avoid cash payments after 1 July 2026.

• Verify that the landlord accepts only approved methods.

  
  

Ledgerro's Perspective

At Ledgerro, we view this as a straightforward compliance update. However, many landlords and tenants may overlook it if they continue relying on informal payment habits. The best approach is to document everything early, update agreements, and ensure rent payment processes are fully electronic before the deadline.

If you manage rental income, tenant payments, or property-related bookkeeping, now is the time to review your setup. Avoid last-minute issues.

You can read the relevant announcement here.

Frequently Asked Questions (FAQs)

Q: Is cash rent allowed after 1 July 2026?

A: No. The announcement states that rent for immovable property in Cyprus must be paid exclusively through approved electronic means.

Q: Does this apply to all rent amounts?

A: Yes. The rule applies regardless of the amount of rent.

Q: Does this apply to companies too?

A: Yes. It applies to both natural and legal persons.

Q: What payment methods are allowed?

A: Bank transfer, debit card, credit card, and other recognized electronic payment methods.

This comprehensive update ensures that all rental property owners and tenants in Cyprus are well-informed and prepared for the upcoming changes.