Costs Involved in Buying A Property in Cyprus

Just as in any country, there are various costs associated with buying a property in Cyprus and we’ve included some basic general information below to guide you. However, you should always seek the advice of a professional property lawyer, as each purchase and its circumstances are different.

COSTS

Lawyer’s Fees usually cost around CYP1,000 (€1,700, UK£1,200), although the final fee depends on the complexity of the sale.

Surveyor’s Fees obviously vary depending on the value of your property and the amount of detail you require. Average charges around CYP500 (€800, UK£600).

Estate Agent’s Fees are usually 5 per cent of the property price.

TAXES

You will also be liable for certain taxes, which are detailed below.

1) Transfer Fee

This is paid when the title deeds are transferred to your name at the District Lands Office (Land Registry). Transfer fees are charged as a percentage of the market value of the property at the date of purchase. The scale of fees is as follows:

Up to CY£50,000	3 per cent of market value
Between CY£50,000 ­ - 100,000	5 per cent of market value
Over CY£100,000	8 per cent of market value

You can reduce these fees by purchasing in joint names because the value of the property is divided between them. The example below shows how this works:

Purchase in a single name - property value of CY£150,000

Value of Property	Tax Rate	Amount payable
First Y£50,000	3 per cent	CY£1,500
Second CY£50,000	5 per cent	CY£2,500
Remaining CY£50,000	8 per cent	CY£4,000

Total payable - CY£8,000

Purchase in joint names ­ property value of CY£150,000

Joint purchasers mean that the value is divided, the tax is reduced thus:

Each purchaser taxed on CY£75,000

Value of Property	Tax Rate	Amount Payable
First CY£50,000	3 per cent	CY£1,500 x 2 (3,000)
Remaining CY£25,000	5 per cent	CY£1,250 x 2 (2,500)

                                                                                       
Total payable - CY£5,500 (Saving of CY£2,500)

2) Immovable Property Tax

Once you become the registered owner of your property, you must pay an annual immovable property tax. This tax is based on the market value of your property as of 1st January 1980 and the first CY£100,000 is exempt. This means that only owners of very large properties of high value will have to pay this tax.

Property valued at between CY£100,001 to CY£250,000	- 2.5% per thousand
Property valued at between CY£250,001 to CY£500,000	- 3.5% per thousand
Property valued at over CY£500,000	- 4% per thousand

You sometimes have to pay this tax at the time of purchase if you buy a property on a development. The reason is because is the developer has already had to pay this tax on the entire plot of land. Now he wants to charge you, as the new owner, for your portion. You should always get a receipt for any tax paid as you may be able to claim a refund.

3) Stamp Duty

Stamp Duty is payable at the rate of CY£1.50 per thousand, up to a value of CY£100,000. The charge is CY£2.00 per thousand for every further thousand. So for a property costing CY£150,000, the charge will be CY£250.

4) VAT

VAT is payable on new properties from 1st May 2004 - the date that the Republic of Cyprus joined the EU. However, it’s not payable on any properties where the planning permit was lodged with the Planning Department before that date. The VAT rate is 15 per cent, with reduced rates off 5 and 8 per cent.

5) Capital Gains Tax (CGT)

When you come to sell your property in Cyprus, you will be liable for Capital Gains Tax at a rate of 20 per cent, whether you are resident or non-resident. There is an exemption of CY£10,000 per person and you will also be exempt if the property is sold because of a death or is a gift to a close relative.

If the property is your principal residence and you own it for more than five years then there’s an exemption of CY£50,000.

6) Inheritance and Gift tax

The big taxation bonus in the Republic of Cyprus is that there is no inheritance or gift tax or estate duty to pay. If you’re a tax resident in Cyprus and die with a valid will, there will be no tax to pay on your worldwide estate.