Purchasing property in Cyprus comes with certain tax obligations and fees. Here’s a straightforward overview of what you need to know.
Stamp Duty
What is it? A tax applied to official documents, including property contracts.
Rate: The rate varies based on property price. Generally, the first part of the property value has a lower rate, and any amount exceeding that is taxed at a slightly higher rate.
Tip: Ensure you pay this within 30 days of signing the contract to avoid penalties.
VAT (Value Added Tax)
What is it? A consumption tax is applied to various goods and services, including new properties.
Rate: The standard VAT rate in Cyprus applies to properties. However, there are reduced rates for first-time buyers.
Tip: Check if you qualify for any VAT reductions or exemptions.
Transfer Fees
What is it? Fees are paid to transfer the property’s ownership title from the seller to the buyer.
Rate: It’s calculated based on the property’s market value at the time of the transfer. Rates are progressive.
Tip: If the property is in joint names (e.g., a couple), the value is split, often resulting in reduced fees.
Immovable Property Tax (IPT)
Note: As of my last update in 2022, this tax was abolished in 2017. Still, it’s essential to be aware in case of references or rare situations where it might still apply.
Local Authority Taxes & Rates
What is it? Fees for services like garbage collection, sewerage, and street lights.
Rate: Based on the property’s size and location.
Tip: This is an annual fee. Remember to budget for it each year.
Conclusion
Being informed about taxes and fees ensures a smooth property purchasing process in Cyprus. Always consult with a local property lawyer or accountant for personalized advice, and consider using platforms like INDEX.cy to compare properties and get more insights into the Cypriot real estate market.
