Cyprus Property Taxes

Cyprus Property Taxes

Transfer Fees
The purchaser will be liable to pay the following transfer fees for the property acquired, when this is registered in his/her name at the Land Registry Office. The fees are charged on the property’s market value at the date of purchase.

Property Value in € – %
Up to 85,000 – 3%
85,001 – 170,000 – 5%
Over 170,000 – 8%
(The rates above apply per person)

Hint: The more buyers are included in a contract of sale, the less transfer fees are being charged. For example, if 2 persons are jointly set as the buyers in a contract of sale, then each buyer is charged half of the transfer fees on the purchase price; if the joint buyers are 3, then the buyers are charged  ⅓ of transfer fees on the purchase price and so on.

Important Note: The Cyprus Parliament announced the abolishment or reduction of property transfer fees, this offer applies until the end of 2018 and the following will apply:

1. Exemption from transfer fees if the transfer relates to a transaction that is subject to VAT. VAT is charged at the standard rate of 19% where 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 a minimum of 10 years.
2. In case a transaction is not subject to VAT, the legislation provides for an exemption of 50% of the transfer fees. This applies to transactions where transfer fees apply or are due and the transfer relates to plots of land, buildings or interests in land or indivisible interests that are sold for the first time from the date of issue of the relevant building permit and the relevant contract is prepared and submitted for the first time to the local District Land Registry during the period of application of the law.

Stamp Duty
A one-off stamp duty is levied on the purchase of property in Cyprus. The rates are dependent on the contractual purchase amounts and payment is due within 30 days of signing the Sale Agreement. The amount is payable by the purchaser to the tax authorities.

Purchase Price in € – Stamp Duty in %
Up to 5,000 – 0%
5,001 – 170,000 – 0.15%
Over 170,000 – 0.20%

Note: Maximum Duty €20,000

No VAT is charged on the purchase of land.

Important note for the reduction of VAT to 5%

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 which are conducted from October 1st 2011 onwards. The rate will apply for the first 200 m2 of residences of total covered area of up to 275 m2.

Immovable Property Tax*
Each registered owner is liable for this annual currant imposed tax calculated on the market value of the property as at 1st of January 1980.

Up to €40,000 – 0.60%
€40,001 – €120,000  – 0.80%
€120,001 – €170,000   – 0.90%
€170,001 – €300,000 – 1.10%
€300,001 – €500,000 – 1.30%
€500,001 – €800,000 – 1.50% 
€800,001 – €3,000,000 – 1.70% 
Over €3,000,001   – 1.90%
(with minimum tax €75)

Capital Gains Tax
Capital Gains Tax is levied at 20% on gains arising from the disposal of property by each individual person.The gain is reduced by an indexation allowance that takes into account the inflationary increase over the years the property was owned. Non-residents are only taxed when selling property situated in Cyprus. The following allowances are available to individuals:

The first €17,086 of gains arising from the first disposal of any property in Cyprus. The first €85,430 of gains arising from the disposal of a house used by the owner for his/her own habitation. This allowance can only be claimed once. An individual claiming a combination of the above allowances in only allowed a maximum allowance of €85,430.

Inheritance Tax
Inheritance Tax has been abolished with effect 1 January 2000, and is no longer imposed.

Local Authority Tax
Property taxes levied by the local authorities are payable annually and may vary, depending on the size of the property. The tax covers the cost of garbage disposal, street lighting, etc.

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