Buying, Selling, Rentals, Land and Property Management

Below is a comprehensive guide to Cyprus Property Taxes, if you require more information, please get in contact with us, and will gladly answer any of your questions.

Transfer Fees

The purchaser will be liable to pay the following transfer fees for the property acquired, when this is registered in his/her name at the Lands' Office. The fees are charged on the property's market value at the date of purchase.

Declared Sales Value or Market Value	Rate %
0 - € 85,430.07	3
€ 85,431.78 - € 170,860.14	5
Over € 170,861.85	8

Transfer fees to couples who jointly place the property in their names have an advantage in that they each pay according to the value of each half. E.g. For property up to € 170,860.14 the transfer fees are 3% on € 85,430.07, for the husband and 3% on € 85,430.07 for the wife (total payment of fees € 5,130.00) rather than € 6,840.00 using the above table.

Immovable Property Tax

The registered owner of the property is liable to an annual immovable property tax calculated on the market value of the property as at 1st January 1980.

Property Value 1980 price €	Annual Tax € / thousand
upto € 170,860.14	zero
€ 171,032.71 - € 427,150.36	2,5
€ 427,152.07 - € 854,300.72	3,5
over € 854,302.43	4

Stamp Duty and Mortgage Fees

Unless otherwise stipulated in the contract, the purchaser is liable for the payment of stamp duty at the rate of EUR 0.15% per thousand of the value up to EUR 170,860.14. Thereafter the rate becomes EUR 0.20% per thousand.

Although the non-affixing of stamps does not invalidate the contract, the stamp duty plus a fine will be payable when the document is produced to the court or any Government department. In order to avoid the payment of a fine, the documents should be stamped within 30 days of their signing. In case of mortgage, the registration fee is 1% of the amount secured, plus the relevant stamps.

Income Tax and Capital Gains Tax

Dealers in land are treated under the income tax laws whereas non dealers under the Capital Gains Tax ones. Capital Gains Tax is levied at the rate of 20% on gains arising from the disposal of immovable property or the disposal of shares of companies the assets of which consist mainly of immovable property. The cost of acquisition and sale includes interest of payments paid for the acquisition. Additions to the property etc. are also deductible from gains. On the acquisition cost, the inflation rate (as this is published by the Government) is added on. Thus the tax is charged on gains which takes into account the inflation (which for the last years is 2.5%- 3.5% p.a.). The Gains, Tax as a whole, has minimal effects since the appreciation of value coupled with the following allowances and inflation leaves little for taxation. In the case of companies these allowances are not applicable.

Allowances

The following lifetime allowances are available to individuals:

• The first € 17,086.01 of gains arising from the disposal of any property.
• The first € 25,629.02 of gains arising from the disposal of agricultural land by the farmer (subject to certain conditions).
• The first € 85,430.07 of gains arising from the disposal of a house used by the owner for its own habitation (subject to certain conditions).

The above allowances are not available separately.

An individual claiming a combination of the above allowances is only allowed a maximum allowance of € 85,430.07. Cyprus residents and companies registered in Cyprus are subject to Capital Gains Tax when disposing their property, wherever it is, in Cyprus or overseas.

Non-residents are only taxed when selling property situated in Cyprus . They can be totally exempt from this tax if they can prove that they acquired the property in question by importing foreign currency between 1 August 1980 and 13 July 1990.

Losses are calculated in the same way as gains and can be set off against capital gains in the current year and future years.

Estate Duty

Estate duty was abolished as from 1 January 2000. Residents domiciled in Cyprus are exempt from Estate Duty from worldwide assets. This is especially important for people with tax inheritance problems.

Value Added Tax (VAT)

Flat rate of 15%.

Since 1/5/04 a statute in respect of VAT on properties was introduced. In addition to other amendments, this statute introduced VAT on the rate of 15%.

No VAT will be imposed on land deals until 2007.

However, the government will submit proposals for special grants for first home-buyers – depending on income levels and the size of the house. If these satisfy the House, MPs may agree to reduce the rate to 5%, although this appears easier said than done.

Other Taxes

These are taxes paid to the municipality and depend on the size and value of the property. It covers refuse collection, sewerage, street lights etc. and it varies according to the area, from € 85.43 - € 256.29 annually.

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