What this covers
The 2026 Cyprus tax reform introduced a set of personal deductions for individuals: for dependent children, for rent on your main residence, and for mortgage interest on it. Most of them are means-tested: you only get them if your household income falls under a threshold, and that threshold changes with the number of children you have.
This guide sets out the thresholds and the amounts. Every figure here comes from the Tax Department’s own published guidance and worked examples.
The income criterion
Whether you qualify at all depends on total gross household income, tested against a threshold that rises with the number of dependent children.
| Household | Income threshold |
|---|---|
| Single person, living with no dependent children, spouse or civil partner | €40,000 |
| Family with no children, or one or two | €100,000 |
| Family with three or four children | €150,000 |
| Family with five or more children | €200,000 |
Note that a family with no children is still tested at €100,000, not at the single person figure, and that the €150,000 band covers three or four children rather than three alone. These come from the Tax Department’s FAQ of 11 May 2026, question 13.
Three things catch people out here.
A single parent is not a “single person”. If you live with your dependent child you are a family for this test, and you take the family threshold for your number of children, not the €40,000 figure. What decides it is whether the child lives with you. The Department’s own examples make the point in both directions: an unmarried mother living with her child is a single parent family tested at €100,000, while a divorced mother whose child lives with the father is a single person tested at €40,000.
“Family” is broader than “married”. Partners in a civil partnership are treated as a family. So are unmarried partners who have a child together. The Tax Department treats them as one household and adds their incomes, even without a civil partnership.
The test is on combined gross income, not on each person’s income separately. Two earners on €60,000 and €35,000 are tested as €95,000.
Deduction for dependent children
The amount increases with each child:
| Child | Deduction |
|---|---|
| First child | €1,000 |
| Second child | €1,250 |
| Third child, and each child after | €1,500 |
These accumulate. A family with two children claims €2,250; with three, €3,750; with four, €5,250; with five, €6,750. The €1,500 is not a cap that stops at the third child, which matters given that the income table runs to five or more.
Note that each parent is entitled to the child deduction, not the household jointly.
Single parents get double. If you are a single parent living with your child, the deduction for each dependent child is doubled: €2,000 for the first, €2,500 for the second, and €3,000 for the third and each one after. The income thresholds that apply to you are the family ones, not the single person figure.
Deduction for rent or mortgage interest on your main residence
This is one deduction, not two. Rent on your main residence and interest on a performing home loan for your main residence share a single cap of €2,000 per person. You cannot claim €2,000 for rent and another €2,000 for interest.
The Tax Department addresses this directly. Asked whether someone who paid both in the same year may claim €2,000 for each, its answer is: no, the maximum in total is €2,000. Form T.D.59A carries a single line for the claim, reading rent or interest, not one line for each.
The cap is per person rather than per household. Where a couple’s combined qualifying payments exceed one person’s cap, the total can be split between them however they choose, provided no individual claims more than €2,000.
Other qualifying expenditure
The reform also introduced deductions for energy upgrades to your main residence, the purchase of an electric vehicle, and insuring your home against natural disasters.
Energy upgrades and electric vehicles: up to €1,000 per person a year. The deduction is given for the actual spend, capped at €1,000 per spouse, civil partner or single person in a tax year. If you spend more than that, the balance is not lost: it carries forward and can be deducted up to €1,000 a year for each of the following four years, provided you meet the income criterion in each of those years. Any state grant reduces the qualifying spend and counts towards your household income for the criterion.
The Department’s worked example runs a €4,000 photovoltaic installation against a €1,000 state grant, and claims €1,000 in 2026, €1,000 in 2027 and €1,000 in 2028.
Insurance against natural disasters is the exception, and it is not income-tested. Up to €500 per person for insuring your home against natural disasters, and this one is granted irrespective of any income criteria. If your household is over the threshold and assumes it gets nothing, this is the deduction it is still entitled to. The combined claim by a couple cannot exceed what was actually paid.
Worked example
A couple with two children, one earning €60,000 and the other €35,000, who paid €5,000 in mortgage interest on their main residence.
- Combined gross household income: €95,000
- Threshold for a family with two children: €100,000 → criterion met
- Each parent claims the child deduction: €2,250 (€1,000 + €1,250)
- Each spouse may deduct up to €2,000 of the mortgage interest
This is Example 1 from the Tax Department’s own published examples.
What commonly goes wrong
Assuming unmarried partners are assessed separately. If you have a child together, your incomes are combined for the income criterion whether or not you have a civil partnership.
Missing the threshold by a small margin. The criterion is a cliff edge, not a taper. A household on €100,001 with two children does not get a reduced deduction. It gets none.
Forgetting that a child stops being dependent. When a child ceases to qualify, both the deduction and the household’s threshold change. The official examples cover this.
Claiming rent and mortgage interest as two separate €2,000 deductions. They share one €2,000 cap per person. Paying both in the same year does not double it.
Treating the €2,000 cap as a household cap. It is per person, so a couple’s combined claim can exceed €2,000, but no individual’s can.
Where to check
These figures come from the Cyprus Tax Department’s Tax Reform 2026 materials: the explanatory guide, the FAQs, and the 16 official worked examples. Those documents are published in Greek only.
Deductions interact with your wider position, and the official examples do not cover every household. If anything here is close to a threshold, have it confirmed by a licensed firm before you file.
