Taxes and Fees
1. Fees to Pay when Purchasing a Property in Cyprus and Signing a Contract of Sale in Cyprus
a. Stamp Duty
In the case of a sales contract, you, as the purchaser, are liable for the payment of Stamp Duty at the rate of 0.15% on any property with a value of up to €170.860,14 after deducting an allowance of €5.000. Thereafter the rate becomes 0.20%. Stamp Duty is payable within 30 days of signing of the contract of sale.
|Total stamp duty payable||€297|
b. Land Registry Deposit fees for Signed Contract of Sale
Upon depositing the signed contract of sale to the Cyprus Land Registry a €50 euro deposit fee must be paid by the purchaser of the property.
c. VAT Payable On Property
The Standard Rate of VAT in Cyprus on all goods and services is 19%.
First time buyers who purchase a property for permanent residence or as a holiday home for their own use are entitled to a lower VAT Rate of 5% subject to the approval of the Cyprus VAT office.
No VAT is charged on the purchase of land.
2. Annual Property Taxes and Fees to Pay As A Owner of a Cyprus Property
a. Immovable Property Ownership Tax
As of 1 January 2017 there is no immovable property tax in Cyprus.
b. Local Authority Fees
Depending on the size of your property, local authorities charge between €85 – €256 per annum for regular refuse collection, street lighting, sewerage and similar community services. Communal Services fees are payable to your local municipal authority.
Communal services fees - communal charges greatly depend on the type and size of property that you have purchased. If you have purchased a property that is part of project which consists of a facilities such as swimming pool, jacuzzi, spa etc- communual fees will need to cover an owner’s share of the cost of cleaning and maintaining the facilities. As such, the communal charges will be substantially higher in comparison to a property bought on a project which provides only basic facilities. Usually, such charges range between €30 -€50 on a monthly basis for small multi-residential complexes.
c. Municipality Tax
As the registered owner of the property, you 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 0.001‰ - 0.002‰. Municipality tax is payable to your local municipal authority.
d. Sewage Tax
As the registered owner of the property, you are required to pay an annual Sewerage Tax, calculated on the market value of the property as at 1st of January 1980. Rates vary from 0.03‰ – 0.035‰. Sewerage taxes are payable annually to your local sewerage board.
e. Other utilities/insurance rates
Other utility costs are fairly low – telecommunication rates are very competitive worldwide, and electricity costs on average €500 annually depending on average consumption, and water rates at €200 on average depending on average consumption annually. These are usually payable monthly or quarterly in advance. They vary from development to development and depend on the area and type of the property.
Insurance Rates - In general, institutions are also English speaking and the procedure of filing and claiming insurance is very similar to that of EU countries such as the UK. Moreover, property insurance is priced at 1.65% of the current property value and contents are determined on 2% of their total value.
f. Inheritance Tax
There is no inheritance tax in Cyprus.
g. Tax Privileges
Personal effects, household goods and furniture can be imported duty free by immigrant retirees, provided they are for personal use and have been used for a reasonable period of time - approximately one year. Also, there is no duty on a car, and retired couples enjoy the additional concession of two duty free cars.
h. Tax Advantages
Retirees drawing a pension are exempt from withholding taxes at source, and may be taxed at the nominal rate of about 4% or less depending on income. Additionally, Cyprus has Double Taxation treaties with many European and other countries, safeguarding its residents from paying tax in both countries.
NOTE: The above information should be only used as a guideline and is likely to differ for each individual case. For more in-depth information, or for specific questions, please contact us via email email@example.com, or Telephone (00357) 24828161, or Fax (00357) 24828110.