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DOING BUSINESS IN CYPRUS

What you need to know when buying property in Cyprus

Buying property in Cyprus is a relatively straightforward process with fees being among the lowest in Western Europe. Fees and taxes are detailed below.

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* Buyers who purchase immovable property subjected to V.A.T. will not pay any fees at the transfer of the Title Deed. In cases where immovable properties have not been subjected to V.A.T. the buyer will be burdened with 50% of the standard transfer fees. * On October 2011 V.A.T. regulations were changed for buyers of newly constructed houses purchased from a developing Company to be used as their permanent residence in Cyprus. Upon signing the contract, a purchaser can apply to the V.A.T. Authorities for the reduced 5% V.A.T. rate instead of the applied standard rate of 19%. The procedure is easy and the permission for the reduced rate is granted within one month of the application date.
  • Sewage and Drainage Fees:

Annual Sewerage and Drainage fees are imposed on all registered immovable properties calculated on the estimated value of each property as per the Department of Land and Surveys valuation as at 01/01/2013 at the rate of 0.072%.

  • Municipality Immovable Property Tax

An annual municipality tax is imposed on all registered immovable properties calculated on the estimated value of each property as per the Department of Land and Surveys valuation as at 01/01/2013 at the rate of 0.02335%.

  • Other Municipality Taxes

Refuse collection fees are charged annually by the Municipality Authority on all registered immovable properties. The amount charged by Larnaca Municipality is a standard fee of €170.

  • Immovable Property Tax

This tax has been abolished since 01/01/2017.

  • Electricity Authority and Water Board

The connection to the Water Supply System requires a deposit of €50 refundable on transfer of the property to another person.

The connection to the Electricity Network requires a deposit of €75 refundable on transfer of the property to another person.

Stamp duty is levied on property purchase contracts. Rates vary between 0.015% and 0.020% payable within 30 days of signing a contract. Stamp duty is calculated on the value of the agreement at 0.015% for amounts up to €170.000, and at 0.020% thereafter, per agreement. The person legally liable to pay the stamp duty is the Buyer. It is common practice in Cyprus for an immovable property to be developed before the issuance of its title deed. The length of time until issuance will vary depending on the peculiarities of each case. However, under the Specific Performance Law, once the property purchase contract has been signed by both parties the purchaser or his lawyer will stamp and register it with the District Land Registry Office to safeguard the Buyer until the title deed is issued whereby the purchaser will be able to transfer the property on to his name.

The transfer of immovable property from one owner to another is subject to a transfer fee calculated on the market value of the property as estimated by the Department of Land and Surveys. The fee is paid by the acquirer to the Department of Land and Surveys.

If the transfer relates to a transaction subjected to VAT then exemption from transfer fees applies.

If the transfer relates to a transaction not subjected to VAT then the acquirer will be burdened with 50% of the standard rates below.

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