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Law & Taxes

Transfer Fees

Real Estate Transfer fees are imposed by the Lands Registry in order to transfer FREEHOLD ownership to the name of the purchaser. The transfer fees are due for payment when the transfer of the title deed in the name of the purchaser takes place. The Purchaser is solely responsible for the payment of the transfer fees. The rates are on a graduated scale.

Value of property (€)

Transfer fee rate (%)

up to 85.430,07

3

from 85.430,08 to 170.860,14

5

from 170.860,15 and over

8

If the property is in joint names e.g. of a couple (husband and wife) or two individuals, then the purchase value is divided into two parts which results in reduced transfer fees.

The following example clearly illustrates this:

For property purchased for € 200.000 in one name, the fees payable are € 9.165,59.

For Property in one name

Up to € 85.430,07

@ 3%

= € 2.562,90

from € 85.430,08 to € 170.860,14

@ 5%

= € 4.271,50

The remaining € 29.139,86

@ 8%

= € 2.331,19

Total fees payable

= € 9.165,59

For property purchased for € 200.000 in the names of two persons, the fees payable are € 6.582,80.

For property in the names of two persons

First € 85.430,07

@ 3%

= € 2.562,90 (Share of husband)

Second € 85.430,07

@ 3%

= € 2.562,90 (share of wife)

The remaining of First, € 14.569,93

@ 5%

= € 728,50 (Share of husband)

The remaining of Second, € 14.569,93

@ 5%

= € 728,50 (Share of husband)

Total fees payable

= € 6.582,80

Transfer title fees calculator

Property Taxes, Fees, Rates

Immovable Property Tax

From 01.01.2017 the immovable property tax was abolished. 

Previosly the annual immovable property tax was calculated on the market value of the property as at 1st January 1980 and applies to the immovable property owned by the taxpayer on 1st January each year.

Market value of property (1/1/1980)(€)

Annual Property tax (‰)

up to 120,000

0

120,001 to 170,000

0.4

170,001 to 300,000

0.5

300,001 to 500,000

0.6

500,001 to 800,000

0.7

Over 800,000

0.8

Capital Gains Tax

On gains from disposal of immovable property situated in Cyprus, capital gains tax will be imposed at the rate of 20% with the first € 17,086 being exempt for each person. The gain is the difference between the sales proceeds and the original cost of the property. In the case of a property which was purchased before 1/1/1980, the gains are the difference between the sales proceeds and the market value of the property as of 1/1/1980.

The seller is entitled to a further allowance regarding the transfer fees paid, inflation rate per year and the cost of any additions made to the house.

Gains from the disposal of a private residence are exempt up to € 85,430 in total if the owner resides in it continuously for at least five years prior to disposal.

Gains from the disposal of a dwelling house are exempt up to € 85,430 in total if the owner resides in it continuously for at least five years prior to disposal.

Stamp Duty on Contracts

The purchaser is liable for the payment of stamp duty on the purchase price of the property at the rate of € 1.5 per thousand up to € 170.860 and thereafter at the rate of € 2.0 per thousand.

This should be paid within 30 days from signing of the contract of sale.

For example if the purchase price is € 256,290

first € 170,860

1.5‰

€ 256.29

next € 85,430

2.0‰

€ 170.86

Total

€ 427.15

Estate Duty

Estate Duty tax has been abolished as from the first of January 2000
(Statute No.78(1)/2000).

Local Authority Taxes & Rates

A rough guide could be approximately € 85 - € 260 per year depending on the size of your property.

This tax is for refuse collection, street lighting, sewerage, etc.

The basic utilities, electricity, water and telephone are payable individually in accordance with the consumption and based on a meter reading.

VAT

Since 01/05/2004 a new statute in respect of VAT on properties has been introduced. Disposals of newly-constructed properties for which a proper application for planning permit has been submitted with the relevant authorities after 01/05/2004 are subject to VAT at standard rate (currently 19%).

Since 08/06/2012 any person that is buying his/her first permanent residence in Cyprus can apply for a reduced VAT rate (defined at 5%).

It is no longer required (as was previously) to become a permanent resident first, and then to apply for the special rate of 5% VAT. The purchaser must complete a form at the VAT Authorities (like all Cypriot nationals) declaring his/her intention and commitment to use the house that he/she is purchasing, as the permanent residence for himself and /or his family in Cyprus. The same procedure and set of documents, as before, need to be provided in order to secure the certificate from VAT.  (This process is the same procedure followed by all Cypriot nationals).   

Please note the following important parameters:

- The house must be used only for personal and /or family living of the purchaser.
- It is not permitted to generate any income such as rental, or to utilise the property as an investment or any other type of business.
- The VAT Authorities maintain the right, and most probably at a later stage after possession (6-12 months), to investigate each case to ensure that the purchaser has honoured the above requirements.
- In the event that the purchaser has ceased to use the property as his permanent residence in Cyprus, including resale of the property, within a period less than 10 years from possession, then the purchaser must pay to the VAT Authorities the remaining VAT of 12% (17% less 5%) on the purchase price.

Tax Advantages

Cyprus is unique when it comes to the taxation aspects of living on the island.

The following income tax rates apply to individuals:

Chargeable income (€)

Tax Rate (%)

Accumulated tax (€)

0 – 19,500

-

0

19,501 – 28,000

20

1,700

28,001 – 36,300

25

3,775

36,301 – 60,000

30

10,885 

over 60,000

35

 

Retirees who become residents in Cyprus are taxed on their pensions from abroad at the rate of 5% per annum while an annual exception for the first €3,420 is granted.

Additionally, Cyprus has established Double Taxation treaties with the majority of European and non-European countries, safe-guarding that its residents will avoid paying tax in both countries. This gives the option to the citizens of these countries to take advantage of the very low rates in Cyprus.


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