Costs when buying property in Cyprus


In the article “Purchasing property in Cyprus” we talked in detail about the advantages of purchasing a home in Cyprus, looked at the step-by-step purchase process, as well as the problems that a foreign buyer may encounter.
In this article we want to talk about the costs when buying property in Cyprus, as well as the taxes that must be paid to the foreign owner during the purchase and sale transaction. You can read about property taxes paid when owning a home, as well as the cost of utilities in Cyprus in our article “Maintenance of real estate in Cyprus”.

Table of costs and taxes when purchasing property in Cyprus









Expenses Bid Who pays
Tax on transfer of ownership 3 – 8% (pay 50% of the rate) buyer
VAT
19%
buyer
Lawyer’s fees
0.1% – 1.00%
buyer
Stamp duty
0.15% – 0.20%
buyer
Realtor’s fee
3.00% – 5.00%
salesman

Tax on transfer of ownership in Cyprus

The Transfer Fee in Cyprus is paid exclusively when purchasing secondary real estate. The tax base for calculating this fee, paid to the Department of Land Resources and Topography when transferring rights to real estate, is the price of the object specified in the contract.







Market value, € Bid, %
0 – 85 000 3
85,000 – 170,000 5
from 170,000 and above 8

The rates shown in the table are reduced by 50%.

Calculation for a property worth €500,000: you must pay 1.5% of the first €85,000 = €1,275, 2.5% of the next €85,000 = €2,125 and 4% of the remaining €330,000 = €13,200.


Total payable: €16,600.

If real estate is transferred free of charge, tax on the transfer of property rights is charged at the following rates:

  • 0% – when transferred to children from parents.
  • 0.1% – when transferred to a spouse or between third-degree relatives.

This tax is not paid when purchasing real estate in Cyprus if the transfer of ownership is carried out during a reorganization of a certain type, as part of restructuring, bankruptcy, liquidation, sale of mortgaged real estate, as well as when transferring property subject to VAT.

You can save on this tax if you make a purchase for several people, for example, a husband and wife. Then the tax will be calculated separately for each of them based on the value of the share of real estate that they acquire. That is, if there are two buyers, the purchase amount is divided by two, and the tax on it is calculated at a low interest rate.

Stamp duty in Cyprus

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This is a state fee paid when transferring ownership of real estate. Stamp duties in Cyprus, payable once a maximum of 30 days from the date of conclusion of the contract of sale, are charged at the rates below:







Reward amount, € Bid, %
First 5000 0
5001 – 170 000 0.15
From 170,000 0.2

The maximum amount of stamp duty in Cyprus is €20,000.

Calculation of stamp duty for a property priced at €500,000. The first €5,000 is tax free, the next €170,000 is taxed at a rate of 0.15% = €225, the remaining €325,000 is taxed at a rate of 0.2% = €650 .

Total: €875.

You can also save on stamp duty, as well as on the tax on transfer of ownership, by registering the purchase for several people.

Legal services in Cyprus

Typically, legal services in Cyprus cost 1% of the price of the purchased property (plus VAT).
VAT in Cyprus when purchasing real estate
VAT in Cyprus on the purchase of real estate is paid when purchasing new housing, which includes primary market real estate, the construction authorization for which was issued after May 1, 2004. When concluding a transaction, standard VAT of 19% is charged on their purchase. However, on June 8, 2012, a rule came into force in the country according to which, when purchasing new real estate, it is possible to pay VAT at a reduced rate of 5% if the following requirements are met:

  • the buyer must be a private (individual) person;
  • this property must become his main place of residence in Cyprus and cannot be used for profit;
  • the buyer is not the owner of the real estate purchased earlier when VAT was calculated at a preferential rate.

The VAT rate of 5% applies to 200 sq.m of housing.



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