CYPRUS PROPERTY TAXES AND FEES
PROPERTY TAXES AND FEES
Here you can find all the information you need about property taxes In Cyprus and any other property charges and fees.
Once the contracts have been signed, four copies are made and stamped at the District Lands Office by the lawyers. The one document is stamped as the ‘original’ and is kept by the buyer’s lawyer, while the remaining copies are stamped with a Revenue Stamp and certified as being true copies of the original.
The stamp duty is paid by the buyer’s lawyer when the contract is signed as follows:
- 0% of the first €5000 of the purchase price;
- 15% of €5001 – €170,000 of the purchase price;
- 20% for any amount over €170,000.
In order to acquire the Title Deeds to the property you have purchase, the Transfer fees must be paid.
- 3% on the purchase price up to €85,000
- 5% on the purchase price from €85,001 to €170,000
- 8% on the remainder of the purchase price over €170,000
VAT PAYABLE ON PROPERTY
If a town permit application is filed before the 1st of May 2004 (Cyprus’ Admission to the EU), there is no VAT. After that date, VAT of 19% of the property price must be paid by the buyer
However, following a recent VAT Amendment Law, a reduced VAT rate, of 5% is applicable based on the following conditions:
- The property must be used as the primary and permanent residence of the applicant (for the following ten years).
- The applicant has not acquired any other residence in Cyprus with a reduced VAT rate.
The applicant must be an individual, over 18 years old, thus legal entities are excluded.
Also, the reduced VAT rate of 5% is applied on the first 200 square meters (building coefficient) of the property as per the architectural plans submitted to the Authorities. On the remaining square meters, the standard rate of 19% is imposed.
IMMOVABLE PROPERTY TAX
There is no immovable property tax. The tax has been abolished since 1/1/2017.
MUNICIPAL/COMMUNITY IMMOVABLE PROPERTY TAX
Depending on the area and size of your property, charges ranging from €80 – €500 per annum for refuse collection, sewerage and street lighting, and similar community services. This is payable to your municipality or local community board
Property owners are required to pay an annual Municipality Tax, calculated on the market value of the property as at 1st of January 1980. Rates vary from 1% – 2%.
Municipality tax is payable to your local municipal authority.
Property owners are required to pay an annual Sewerage Tax, calculated on the market value of the property as at 1st of January 2013. Rates vary from 0.5‰ – 3‰. Sewerage taxes are payable annually to your local sewerage board.
Inheritance tax has been abolished in Cyprus since 2000
CAPITAL GAINS TAX
Capital Gains tax is calculated at a rate of 20% on profits from the sale of immovable property
Profits are the difference between the sales price and the original cost of the property.
The seller is entitled to certain deduction on the tax such as
interest on payments paid for the purchase of the property, additions made to the property and inflation rate. These deductions can significantly lower the tax owed.
Individual property owners are also entitled to the following lifetime allowances on Capital Gains Tax:
- The first €17,086.00 of gains arising from the disposal of any property are exempted.
- The first €25,629.02 of gains arising from the disposal of agricultural land by the farmer are exempted (subject to certain conditions).
- The first €85,430.10 of gains arising from the disposal of a house used by the owner for his/her own habitation are exempted (subject to certain conditions).
The total amount allowed for the above allowances can not exceed € 85,430.10
Cyprus residents and companies registered in Cyprus are subject to Capital Gains Tax when disposing their property, wherever it is, in Cyprus or overseas. However, under certain conditions, Capital Gains Tax can be reduced significantly if the purchase of the immovable property is effected through a Cyprus registered company.
The following categories of immovable property disposals are exempted from the Capital Gains Tax:
- Transfers by reason of death
- Gifts between relatives up to third degree of kindred
- Gifts to limited liability companies when, at the time of transfer and for a period of five years following the transfer, all the shareholders of the company are members of the family of the donor
- Gifts by family companies to their members, but only in cases where the property transferred, was obtained by the company as a gift
- Exchanges of immovable properties
- Compulsory acquisitions
- Gifts to charitable institutions
- Gifts to charitable institutions or the Republic of Cyprus
Communal expenses ia small monthly fee which usually depends on the size of the development and its amenities. They cover the cost of cleaning and maintaining common areas and gardens, communal swimming pool, electricity in common areas, management fees and repairs.