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LEGAL INFORMATION
Costs Associated with purchasing a Property in Cyprus
Stamp Duty
The stamp duty payable on property purchases is as follows: 0.15% (£1.50 per £1,000) is payable on contracts with a value of up to £100.000. For amounts after that the rate rises to 0.2% (£2.00 per £1,000) Stamp duty is payable within 30 days of the contract being signed.
Transfer Fees
Transfer fees are payable by the Purchaser and are due when the title deeds are transferred to your name.
| Purchase Price £ |
Transfer Fees % |
| > £50.000 |
3 |
| £50.000 > £100.000 |
5 |
| £100.000 > |
8 |
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Example 1: The purchase price is £130,000 therefore the transfer fee is calculated as follows:
Example 1
| Purchase Price |
Transfer Fees £ |
| 1 st £50.000 @3% |
1,500 |
| 2 nd £50.000 @5% |
2,500 |
| next £30,000 |
2,400 |
| Total Transfer Fee |
6,400 |
Example 2. The purchase price is £215,000 therefore the transfer fee is calculated as follows:
Example 2
Purchase Price |
Transfer Fee £ |
| 1 st £50,000 |
1,500 |
| 2 nd £50,000 |
2,500 |
| next £115,000 |
9,200 |
| Total Transfer Fee |
13,200 |
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However a way to save money on these fees is to purchase the property in joint names. In this way the value for calculation is reduced by 50%
Let's look at the above examples but with the property purchased in joint names.
Example 1
| Purchase Price
Total Transfer |
Buyer 1 |
Buyer 2 |
1 st £50,000 @3%
3,000 |
1,500 |
1,500 |
next £15,000 @5%
1,500 |
750 |
750 |
Total Transfer fees |
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Example 2
Purchase Price Total Transfer |
Buyer 1 |
Buyer 2 |
| 1 st £50,000 @3% 3,000 |
1,500 |
1,500 |
| 2 nd £50,000 @5% 5,000 |
2,500 |
2,500 |
| next £7,500 @8%
1,200 |
600 |
600 |
| Total Transfer Fees |
9,200 |
A joint purchase will save you £1,900 in example one and £4,000 in example two.
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Immovable Property Tax
As the registered owner of a property you will be liable for this annual tax which is dependant on the value of the property
Value CY£ |
% |
> £100,000
|
NIL
|
100,001 > £250,000 |
2.0 |
250,001 > £500,000 |
3.0 |
500,001 > |
3.5 |
Important Note on VAT
From the 1 st May 2004 VAT will be charged on the purchase of new properties.
5% VAT is payable by first time buyers
15% VAT is payable by everybody else (non first time buyers)
If you are buying a property that has a valid application for planning permit submitted to the Town Planning Department prior to the 30th April 2004 then you will be exempt from VAT.
CAPITAL GAINS TAX
Capital Gains tax is charged at the rate of 20% on profit gained from the disposal of immovable property or from a companies shares where immovable property represents the companies assets.
In the following circumstances the tax paid under capital gains can be reduced for individuals where;
• Adjustments made to the purchase cost taking into account the rate of inflation.
• The purchase cost used to calculate the profit also includes the cost of improvements and or additions to the property and includes interest paid on the purchase.
• A single person receives the following allowances for life:-
a) Capital gains up to £10,000 net from the sale of a family property are exempt of tax
b) Under certain conditions capital gains up to £50,000 net as a result of the sale of a family home are exempt of tax.
An individual cannot claim a combination of the allowances listed above . The total amount that can be claimed by a single person is £50,000.
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