Dear Cyprus Property Buyer,
CYPRUS PROPERTY PURCHASE EXPENSES
- Stamp Duty
After the contract of sale is signed, the purchase is liable for the payment of stamp duty at 0.15% of the value up to €170.860. Thereafter, the rate becomes 0.2%. Payment is due within 30 days of signing the contract sale.
2. Transfer Fees
Upon transfer of the property and Registration in the purchaser’s name, the district Land Registry Office will charge transfer fees, which are based on market value of the property at the time of the purchase and are calculated as follows:
|Property Value €||Fees -%||Transfer fee €|
|Up to €85,000||3%||€2,550|
|€170,001 and up||8%|
If the property is transferred in 2 or more names, on the name of individuals, then the purchase value is split into the parts which results in reduced transfer fees.
The fees mentioned above are calculated per person (per share owner)
NOTE: New legislation Reducing the Cyprus Property Transfer Fees for transfers that take place before 31 December 2016 is as follows:
(a) If VAT was paid on the property, No Property Transfer Fees are payable.
(b) IF VAT was not paid on the property, the Property Transfer Fees are reduced by 50%. However if the Director of the Land Registry considers that the price stated on the contract of sale does not reflect the market value of the property at its date of purchase he may, at his discretion, charge the full Property Transfer Fees based on the market value of the property at its date of sale less the price stated on the contract of sale.
In addition, where a property is transferred from parent to child, Property Transfer Fees have been abolished. Those who have or will purchase property between December 2, 2011 and December 31, 2016 will benefit from the reduced Property Transfer Fees regardless of when the transfer takes place.
Permanent Reduction of Property Transfer Fees
Good News for those who applied for the Title Deeds under the provisions of the ‘trapped buyers’ law and who were concerned that they would be unable to benefit from the 50 per cent reduction in their Property Transfer Fees if the transfer did not take place by 31st December 2016 ( and also everyone else waiting for their deeds).
The Finance Ministry announced that it has lifted the temporary arrangement to reduce Property Transfer Fees by 50 per cent, which was valid until 31st December 2016.
The 50 per cent reduction is now permanent; the law implementing the change, ‘Land and Surveys Department (Fees and Rights) (Amendment) (No. 2) Law’, was passed on 14th July 2016 at a plenary session of the Cyprus Parliament.
3. Value Added Tax on Property Purchases
Acquisition of a new immovable property in Cyprus is subject to VAT (Value Added Tax). In cases of a resale immovable property as well as a new immovable property where an application for a town permit for a buyer was filed before the 1st of May 2004, VAT will not be charged.
If the town planning application has been filed after the 1st of May 2004, VAT is charged on the sales price at a rate of 19%. First-time buyers can apply for VAT reimbursement in cases where they paid the full amount of VAT on single properties purchased after the 1st May 2004.
No VAT is charged on the purchase of land.
A reduced rate of VAT (5%) has been introduced for properties purchased by permanent residents of Cyprus, provided that the property will be used as the main residence of the purchaser for 10 years (minimum). This is applicable only to contracts of sale that are conducted from October 1st 2011 onwards. The rate applies for the first 200 m2 of residences of total covered area of up to 275 m2.
VAT is paid by a buyer when paying a newly built property 5% for a permanent first house residence and 19% for other use ie to be rented.
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Thank you for visiting our website,
B.Sc.Hons.(Econ) – UK, SCV – Senior Certified Valuer.
Specialist for Limassol Properties,
Lemesos , Cyprus