Dreaming of sunshine, low taxes, and a simpler way of life? For thousands of Brits, retiring in Cyprus is a smart and strategic move. With its warm climate, favourable tax treatment for pensions, and English-speaking communities, Cyprus remains one of the top retirement destinations in Europe.
In this guide, we walk you through everything you need to know about retiring in Cyprus from the UK in 2025: visa options, pension taxation, tax residency, and buying property as a retiree.
Why So Many Brits Retire to Cyprus Cyprus combines the relaxed Mediterranean lifestyle with British familiarity. English is widely spoken, and the legal system is based on British common law.
Add in over 300 days of sunshine, quality healthcare, and a lower cost of living than the UK, and it’s clear why so many retirees are making the move. Here are some of the key reasons British expats choose Cyprus:
Climate: Mild winters, hot summers, and sunshine nearly all year round.Safety: One of the safest countries in the EU.Affordability: Lower property prices and utility costs than in the UK.Connectivity: Direct flights to major UK cities.Healthcare: Affordable private clinics and access to the GESY public healthcare system.Residency Options for UK Retirees (Post-Brexit) Since Brexit, UK citizens are now considered non-EU nationals and must apply for a residence permit to retire in Cyprus. There are two main pathways:
1. Temporary Residence Permit (Pink Slip) Valid for 1 year and renewable annually Requires proof of sufficient net income from abroad (min. €24,000/year for a single applicant) Must not stay outside Cyprus for more than 3 consecutive months Does not allow employment in Cyprus If you are considering this rout, our complete Pink Slip guide
2. Permanent Residency by Investment (Golden Visa) Requires €300,000+ investment in new property Annual income requirement: €50,000 for main applicant + €15,000 spouse + €10,000 per child Includes spouse and dependent children If you’d like to obtain permanent residency immediately, explore our guide to the Cyprus Golden Visa costs and requirements
Choosing the right permit depends on your long-term goals, available capital, and how quickly you'd like to make Cyprus your permanent home.
Cyprus Tax Residency Rules To benefit from Cyprus’s favourable tax regime on pensions, you must become a Cyprus tax resident. You can qualify in two ways:
183-Day Rule: Spend more than 183 days in Cyprus in a calendar year.60-Day Rule: Spend at least 60 days in Cyprus, have no tax residency elsewhere, and maintain a permanent residence in Cyprus.Once you're considered a tax resident, Cyprus will tax your worldwide income, but with significant advantages.
How UK Pensions Are Taxed in Cyprus Cyprus has a Double Taxation Agreement (DTA) with the UK, meaning most UK pensions are only taxed in Cyprus once you become a tax resident. There are two tax options available:
Option 1: Flat 5% Tax on Pension Income Applies to pension income over €3,420 Anything above this threshold is taxed at a flat 5% Option 2: Normal Income Tax Rates Your pension is taxed as part of your total income First €19,500 is tax-free Tax rates range from 20% to 35% Example: Pension Income of €30,000
Tax Option
Exempt Amount
Tax Rate
Annual Tax Payable
Flat Rate
€3,420
5%
€1,331
Progressive Rate
€19,500
Up to 35%
€1,900
The best part though, is that retirees can choose the most tax-efficient option every year.
Tax Treatment of Different Pension Types UK State Pension: Taxed exclusively in Cyprus (no withholding taxes in the UK).Private Pensions and Annuities: Also taxed exclusively in Cyprus under the double taxation treaty.Government Service Pensions: These remain taxable only in the UK under the 2019 treaty, unless you are a Cypriot national.Pension Lump Sums: Up to 25% of your UK pension pot can be taken tax-free in both the UK and Cyprus.Avoiding Double Taxation: DT-Individual Form To ensure your pensions are paid gross (without UK tax withheld), you must:
Complete the HMRC Form DT-Individual Have it certified by the Cyprus Tax Department Submit it to HMRC for approval This prevents the UK from taxing your pension, so it's only taxed in Cyprus.
Other Tax Benefits for Retirees 0% tax on dividend income for non-domiciled residentsNo capital gains tax on securities (shares, bonds, etc.)No inheritance tax in CyprusCan You Buy Property in Cyprus? Yes, and many retirees do, but there are some differences depending on your nationality.
EU vs. Non-EU Buyers:
EU citizens: No restrictions. They can purchase property freely in Cyprus.Non-EU citizens (including UK nationals): Must obtain approval from the Council of Ministers before finalising a property purchase. This is typically a formality but still required by law.Thinking about purchasing property? Our Ultimate Guide to Buying Property in Cyprus
Conclusion: Is Cyprus Right for Your Retirement? With a low cost of living, tax-friendly treatment of pensions, and warm year-round weather, Cyprus offers a highly attractive retirement option for British nationals. Whether you choose the temporary Pink Slip route or invest for permanent residency, retiring in Cyprus can offer both financial and lifestyle benefits.
At Clover, we help British retirees navigate the legal, tax, and practical aspects of relocating to Cyprus. From applying for residency to optimising your pension structure, we offer end-to-end support for a smooth transition into your new life abroad.
