Once the purchase contract has been signed, the purchaser will have to pay, within 30 days thereafter stamp duty at the Inland Revenue at the rate of:
- EURO 1.5‰ (per thousand) of the value up to EURO 170.860 (CY£100.000)
- EURO 2.0‰ (per thousand) of the value over EURO 170.860 (CY£100.000)
There shall be penalties in case of failure to pay stamp duty within 30 days.
Transfer Fees for Real Estate in Cyprus
Transfer fees are payable by the purchaser upon transferring the immovable property on his/her name by the Land Registry Office. Transfer fees are calculated on the market value as at the date of purchase as follows:
Value of Property (EURO)
Transfer Fee Rate
up to € 85.430,07
from € 85.430,08 to € 170.860,14
over € 170.860,14
If the property is purchased in joint names (two individuals, for instance, a husband and a wife), then the purchase value of the property is divided into two parts, which results to the reduction of the transfer fees.
Transfer Fees Reduction (UPDATE 2015 – new legal provisions)
On the 9th of July, the Cyprus Parliament passed the bill, according to which the property transfer fees will be reduced by 50 % for all property sales and registrations that will take place before the 31st of December 2016.
Furthermore the following will be exempted from paying transfer fees:
- Transfers from parent to child
- Transfers involving exchanged real estate assets of equal value.
Also, reduced fees will be applicable in case of property transfers from a company to its shareholders.
Immovable Property Tax
Currently, property tax is imposed on the market value of immovable property as at 01/01/1980 and applies to the immovable property owned by the taxpayer on 1st January each year.
- No estate duty applies since 01.01.2000.
Capital Gains Tax
Upon disposal of the property, capital gains tax applies at the rate of 20% on the gain. The first €17.086 (or €85.430 in the case of private residence) is exempt and there is also an indexation allowance. No tax applies whatsoever if the property was purchased between the 1/8/1980 – 13/7/1990 with foreign currency exchange imported into Cyprus.
According to the provisions of the new related law, 100% capital gains tax exemption shall apply on the disposal of immovable property in Cyprus purchased between July 16, 2015 and December 31, 2016.
Reduced VAT on Property
Since 8th June 2012, any person purchasing his/her first primary residence in Cyprus can apply for a reduced VAT rate (5%).
In nutshell, the purchaser must fulfill the following conditions:
- The Property is under construction or completed and subject to VAT
- The Property is intended to be used as the primary residence of the buyer in Cyprus.
- The VAT reduction applies only to the first 200 sq.m. of houses which do not exceed 275 sq.m.
- The applicant must not be in possession of another property as permanent residence in Cyprus.
The applicant must submit an application, including any required documents (purchase contract, architectural plans etc.).
For further details and legal advice, you can get in touch with our team.