Property Taxes for Seller and Buyers in Cyprus – Complete Guide

Summary

This article provides an overview of the primary costs associated with purchasing, maintaining, and selling real estate in Cyprus.

Investing in Cyprus Real Estate

First, there is the excise tax.

Stamp duties on the purchase agreement and any other relevant paperwork are normally covered by the buyer in a property acquisition in Cyprus. The Inland Revenue Service receives these (i.e., the Cyprus Tax Department). In most cases, stamp duties are paid by:

Purchase Agreements Stamp duties for real estate contracts in Cyprus are calculated according to the purchase price. Stamp fees are determined according to the following schedule:

There will be no fees or taxes on the first €5111. Stamp duties amount to 1.15% of the purchase price between €51111 and €171111. Above €171111, a 1.2% surcharge is applied (€2 for each additional certified copy of a contract).

Having legal authority over another Most property purchasers (and vendors) will provide their attorneys power of attorney in order to facilitate the transaction while they are out of the country or unable to make frequent trips to local authorities to sign paperwork. There is also the matter of obtaining an official seal for a Power of Attorney. Stamp duty for a general power of attorney is €6, whereas that for a specific power of attorney (sometimes called a limited or special power of attorney) is €2.

Fees for making a transfer

When the purchaser’s name is officially added to the title deed in Cyprus, the sale is considered finalised. The Land Registry will assess the property’s fair market value on the day of title registration and charge the buyer the following transfer fees based on that valuation:

The aforementioned rates now include a 51% discount, and if VAT has been paid, transfer fees will not be assessed at all. Generally, VAT is due on newly constructed homes. If there is more than one buyer, the total purchase price must be split among them, and each must pay their own transfer expenses. Then, the transfer fees associated with each purchase are reduced by 51%.

3. VAT (Value Added Tax) (Value Added Tax)

Only the purchase price of brand new homes are subject to Value Added Tax (VAT) at a rate of 19%. However, if the property is utilised as the applicant’s primary and permanent residence, the rate can be decreased to 5%.

  • Submitting a complete application package
  • There can be no secondary or temporary uses of the land; and
  • The applicant does not own any other property in the Republic of Cyprus that serves as his or her primary residence.

The first 211 square metres are taxed at the lower rate of 5%, while any additional square footage is taxed at the usual rate of 19%.

Miscellaneous Costs

Minor expenditures, such as those associated with due diligence or the lodging of a purchase contract or assignment, can add up throughout a property purchase. These are some of the more common document lodging fees required by the land register.

Delivery of a sales agreement or power of attorney €51, Property resales that do not include the issuance of new title documents are subject to a fee of 1.5% of the purchase price, with a maximum of €3.111.

One of the benefits of living in Cyprus is the opportunity to own real estate.

1. I.P.T. (Immovable Property Tax) (Immovable Property Tax)

Property owners owed the Inland Revenue this tax until the year 2116 ended. Since the year 2117, this fee has been waived. Those who had property in Cyprus prior to the year 2117 still have to pay the tax. The assessed value of the property as of November 11, 1981 is used to determine the I.P.T. due. You just need one set if you have several properties.

Second, Taxes and Rates Levied by Municipalities

Owning property places it within the purview of a city or village government. Local jurisdictions and councils set their own tax rates and requirements. Yearly tax costs might be anywhere from €91 to €311, depending on the square footage of the home. Services including sewage treatment, garbage pickup, and municipal lighting fall under this category. Electricity and water bills are often calculated by comparing the amount of energy or water used to the predetermined rate. Water bills are often issued by the local municipality or village council, whereas electric bills are issued by the Electricity Authority of Cyprus (E.A.C).

Expenditures Should Be Shared

Those costs are associated with the upkeep of the shared portions of a larger complex, which may include multiple individual residences. Maintenance of these communities is typically handled either by the residents themselves (through the Management Committee) or by a third-party property management firm. Location, property size, and the management company hired to oversee common areas all have a significant impact on the total amount spent on maintenance and upkeep.

Fourthly, Coverage Assurance

Homeowners insurance is a common practise among property owners. Before purchasing a property in a building or project, owners should contact the Communal Management Committee to find out what kind of insurance is in place and what it covers, if anything. Insurance premiums are not uniform and will change based on a number of factors, including the size and condition of the property, as well as the insurer selected.

Death Taxes 5

No need to stress over how the government will assess your estate for taxes when you’re gone. There is no longer an inheritance tax in Cyprus as of January 1, 2111.

The Cyprus Real Estate Market

The Tax on Capital Gains (CGT)

Revenue gained from the sale of property is subject to a 21 percent capital gains tax. Until that amount is depleted, the first €17,186 in capital gains are tax-free for each seller. Certain expenses, in addition to the original acquisition price (buy price), are subtracted from the sale price to determine the taxable gain. The expenditures associated with transferring the property into the seller’s name and with improving the property (such as making structural alterations, installing central heating, and paying the fees of a properly licenced real estate agent in Cyprus) are included here.

Costs of providing the buyer with the required paperwork

The following are some of the things a seller must typically give a buyer when selling real estate:

  • Fees for searching the Land Registry might cost anywhere from €11 to €51.
  • To receive a copy of a contract or blueprint from the Land Registry, you can pay somewhere between €5 and €41.
  • To register a broad power of attorney will set you back €51.
  • Referring back to the aforementioned energy certification

Third: Recurring expenses like rent, gas, and taxes

Before a home may be put up for sale, all loans, utility bills, and tax levies must be paid in full. Deficits owed to the property’s developer, the management board, or the relevant authorities for services like water and power delivery, garbage collection, etc. are all examples of debts that can be secured by a mortgage on the property.

Expenses for Expert Advice

Fees for a real estate agent and a lawyer are normal. Agents that are licenced and regulated can only charge a maximum of 5% commission (plus VAT). In real estate transactions, the seller and the lawyer agree on a fixed charge for legal services. In addition, the law mandates that sellers provide a copy of the property’s energy certificate to the buyer. This can be yours for between €311 and €511.

Michael Caine

Michael Caine is the Owner of Amir Articles and also the founder of ANO Digital (Most Powerful Online Content Creator Company), from the USA, studied MBA in 2012, love to play games and write content in different categories.