Your buying guide to Cyprus investments
Cyprus is justifiably considered one of the most suitable places to invest at. Why you should do that? It is generally believed that investing in Cyprus is good value for money. There is a lower percentage in local property prices comparatively to other European countries such as France, Portugal and Spain. A very strong tendency for investments in Cyprus, especially from the Russian market, Middle East and Asia. A favorable policy is maintained on behalf of the Cyprus government to obtain a permanent residence through the acquisition of real estate.
The legal system is Cyprus is mainly based on the British legal framework, especially in terms of the purchaser rights. For the protection of the purchaser, once the agreement of property sale has been marked and a deposit fee is initially paid, the Land Registry in Cyprus provides a simple and effective legal instrument called the “Specific Performance”. This process protects the purchaser’s ownership rights until the title deeds are issued and transferred to their name while the contract in the hands of the Land Registry cannot be withdrawn by anyone; except the purchaser himself.
What you should know
A one-off stamp duty is calculated on the purchase of property in Cyprus. The rates rely on the contractual purchase amounts and payment must be settled within 30 days of signing the Sale Agreement. The amount is payable by the purchaser to the tax authorities.
|Purchase Price in €||Stamp Duty in %|
|Up to 5,000||0|
|5,001 – 170,000||0.15|
Note: Maximum Duty €20,000
The purchaser is obligated to pay the following transfer fees for the property , when this is registered in his/her name at the Land Registry Office. The fees are charged on the property’s market value at the date of purchase.
|Property Value in €||%|
|Up to 85,000||3|
|85,001 – 170,000||5|
(The rates above apply per person)
Important Note: The Cyprus Parliament announced the abolishment or reduction of property transfer fees, this offer applies until the end of 2016 and the following will apply:
1. Exemption from transfer fees if the transfer relates to a transaction that is subject to VAT. VAT is charged at the standard rate of 19% where a reduced rate of VAT (5%) has been introduced for properties purchased by permanent residents of Cyprus, provided that the property will be used as the main residence of the purchaser for a minimum of 10 years.
2. If the exchange is not subject to VAT, the legislation foresees an exclusion of half of the transfer charges. This applies to exchanges where exchange charges apply or are due and the exchange is related to plots of land or interests in land or interests that are sold for the ﬁrst time from the date of issue of the important building permit and the pertinent contract is arranged and submitted for the ﬁrst time to the District Land Registry amid the time of application of the law.
Cyprus Immovable Property Tax
Each enrolled owner is responsible for this annual currant imposed tax calculated on the market value of the property as at 1st of January 1980.
|Up to €40,000||0.60%|
|€40,001 – €120,000||0.80%|
|€120,001 – €170,000||0.90%|
|€170,001 – €300,000||1.10%|
|€300,001 – €500,000||1.30%|
|€500,001 – €800,000||1.50%|
|€800,001 – €3,000,000||1.70%|
(with minimum tax €75)
Capital Gains Tax
Capital Gains Tax is levied at 20% on gains arising from the disposal of property by each individual person.The gain is reduced by an indexation allowance that takes into account the inflationery increase over the years the property was owned. Non-residents are only taxed when selling property situated in Cyprus. The following allowances are available to individuals:
The first €17,086 of gains arising from the first disposal of any property in Cyprus. The first €85,430 of gains arising from the disposal of a house used by the owner for his/her own habitation. This allowance can only be claimed once. An individual claiming a combination of the above allowances in only allowed a maximum allowance of €85,430.
Inheritance Tax has been abolished with effect 1 January 2000, and is no longer in valid.
Local Authority Tax
Property charges exacted by the government are payable every year and may differ according to the size of the property.
Mutual expenses involve the expenses relevant to communal areas which the owner is liable to pay in fixed intervals throughout the year.