Property Taxes & Fees
Acquiring the Property Title Deed
Once a sale of property is made, it is required by law to transfer the ownership of the property. This procedure is considered as a simple routine process that is made through the Cyprus Land Registry Office. The buyer in person may make the transfer of ownership or the buyer may appoint a Power of Attorney, meaning a lawyer.
The Council of Ministers needs to approve and consent to any property purchases made by foreigners. Additionally, the foreign purchaser needs to present evidence the payment of the property was made using foreign exchange. All this process is merely a routine formality and does not create problems to foreign property buyers who purchase properties in Cyprus.
By law, the Contract of Sale must be in writing. Also, once the Contract of Sale has been signed, the purchaser needs to submit it to the District Land Registry Office within a month from the day the contract was made. This is done to protect the purchaser’s rights concerning the property. The District Land Registry Office will create a title deed, where the name of the new owner will be recorded.
The Transfer Fee is in fact a Property Registration Tax that is paid by the purchaser of the property to the government. The tax is calculated based on the value of the property on the date of the Contract of Sale was made by using the table below:
Transfer Fee calculation:
Property Real Estate Price:
Under €85.430 3%
From €85.431–€170.860 5%
Over €170.861 8%
The Transfer Fee is determined in the identical manner as transactions on the secondary property market, which is when the title deed of a property is transferred from one owner to another.
Immovable Property Tax
The owner of a property is obliged by law to pay a yearly tax known as the Immovable Property Tax. The tax is determined by the value of the property in the market as at 1 January 1980.
The Inland Revenue Office calculates the amount of tax the owner pays. The calculations take into account the 1980 value of the property and the names on the Certificate of Registration of Immovable Property. Immovable properties that are valued below €12,500 are not imposed taxation.
For instance, an owner would be taxed a total sum of € 400 when the immovable property is registered under one owner and its value is set at €60,000. The owner would be charged a 0.6% on the first €40,000 (€ 240) and 0.8% on the remaining €20,000 (€160). Thus, € 240 and €160 sums up to € 400.
If the immovable property is registered under two names, thus it is jointly owned, the tax would be calculated on half of the 1980 value of the property.
Immovable Property Tax Rates:
In Cyprus property owners are charged Stamp Duty one time, which must be settled within a month from the date the Contract of Sale was signed. This procedure must be taken in order to register the transaction of sale in the Inland Revenue Department. When the price of the property is below €170860 the rate of the Stamp Duty is 0.15%. When the price of the property is higher than €170860, than the Stamp Duty rate is set at 0.2%.
Overall, a property owner in Cyprus liable to pay two taxes, the Transfer Fee and Stamp Duty.
Capital Gains Tax Calculation
In Cyprus, when a property owner decides to sell his/her property they are obliged to pay a tax referred to as Capital Gains Tax, that is 20% rate of the profit the owner receives from the selling. Additionally, both individual owners and/or companies are charged Capital Gains Tax at a fixed rate of 20% on the profits earned from the sale of property located on the island.
If an owner decides to sell his/her immovable property via a real estate for a time period of five years, and it is the first time he/she is selling property on the island, then the first € 85,430 the owner receives from the sale of property is exempted from tax, and thus is not imposed the Capital Gains Tax.
Life Time Exemptions are exemptions applicable only to individuals, excluding legal persons). These are employed to decrease or even eliminate the taxable gain.
Calculation of property tax:
Real Estate Price: Annual Tax:
Under €170. 860 not subject to taxation
From €170.861 to € 427.150 0.25%
From €427.151 to €854.300 0.35%
Over €854.301 0.4%
VAT on Property
a building is exempted from VAT when documents were submitted before 1.5.2004 concerning a town planning permit. Also, transfers of lands and plots are not liable to VAT when purchased.
Since January 2013, a VAT rate of 18% is charged on property, which submitted after 1.5.2004. The VAT is charged only once, meaning if a purchaser acquires a property and the VAT has already been paid, the new owner is not forced to pay a VAT tax. VAT is excluded from the price of sale so as to calculate the Transfer Fee easily and efficiently.
VAT in Cyprus increased by 1%, from 18% to 19%, on 13 January 2014.
Local Authority Fees
The local authorities charge annual fees ranging from €85 – €256 for street lighting, sewage system, garbage collection and other similar services offered by the City Council. The fee is calculated depending on the size of the property. The Local Authority Fee must be paid at the local Municipal.