Property purchaser expenses
Mortgage fees in Cyprus, charged by a bank, normally amount to 1% of the amount of the mortgage, which is paid once at the time of signing the agreement for the mortgage with the relevant bank. Other smaller costs, relating to document processing fees usually amount to between €70 and €100.
Interest-only mortgages are still available in some cases, but only for the purchase of off-plan properties, and only for the period until completion and delivery of the property. Interest-only mortgage bear interest on the actual amounts released. For example, if a property is bought off plan for €250,000 with an approved mortgage of €200,000 and only €50,000 is released at completion of the structure, the mortgage interest will be calculated on €50,000 and not on the whole amount approved (€200,000).
Local banks grant loans in the local currency as well as the foreign currency of your choice (you can alternatively apply for a loan from any private bank abroad). The maximum mortgage to be granted by a Cyprus Bank is 80% of the sales price of the property. An individual can apply for a mortgage with a repayment period of up to 40 years, provided that at the end of the forty-year period he/she will not be over 70 years old.
On the signing of a contract the purchaser is liable to pay stamp duties at the rate of 0.151% for properties worth up to €170,860 and thereafter at the rate of 0.201% for properties worth more. The Purchase Contract must be stamped within 30 days of its dated signature.
Property Transfer Fees (Title deeds)
This covers the actual transfer of FREEHOLD ownership to your name and is due when the property is registered in your name at the Land Registry Office. This is to be done after the approval of the Council of Ministers (for non EU residents) and is done by taking all the relevant paperwork to your nearest District Administration Office.
The Property Transfer Fees are a once only payable expense to the Land Registry Office based on the following scale:
Value of property — Transfer fee rate
- up to €85,400 — 3%
- from €85,401 to €170,860 — 5%
- from €170,861 and more — 8%
Also the following rates are applicable in the case of free transfers:
- from parents to children — 0,2%
- between spouses — 0,4%
- between third degree relatives — 0,4%
- to trustees €50
Property owner expenses
Annual property tax
Immovable Property Tax is abolished as from 1 January 2017.
Capital Gains Tax
Capital Gains Tax is levied at 20% on gains arising from the disposal of the property. However, for foreign owned property that is sold, generous allowances and exemptions from Capital Gains Tax exist. As the gain also takes into account inflation, the actual appreciation coupled with the allowances and exemptions results in a minimal taxable amount.
Inheritance tax was abolished as from 1st January 2000.
Value Added Tax (VAT)
The general rule
Disposals/sales of newly constructed properties for which a proper application for a planning permit has been submitted to the relevant authorities after 1st May 2004 are subject to VAT at the standard rate, which is currently at 19% (year 2016).
Since 8th June 2012, any person that is buying his/her first permanent residence in Cyprus can apply for a reduced VAT rate of 5%. It is no longer required (as it was before) to become a permanent resident first and then to apply for the reduced VAT rate. The Purchaser must complete a form with the VAT Authorities (as happens with all the Cypriot nationals) declaring his/her intention and commitment to use the house that he/she is purchasing, as the permanent residence for himself and /or his family in Cyprus.
Please note that in the event that the Purchaser has ceased to use the property as his / her permanent residence in Cyprus, including the resale of the property, within a period less than 10 years from possession, then the Purchaser must pay to the VAT Authorities the remaining Cyprus Property VAT of 14% (19% less 5%) on the purchase price.
Property Owner Costs (Approx. 2016 figures)
a) Electricity, depending on consumption and international oil prices: €40 - €300 every 2 months.
b) Water, depending on consumption: €25 - €50 every 4 months.
c) Sewerage, depending upon household: €95 - €120 per year.
d) Common expenses for apartments, depending on location and complex or building: €500- €1000 per year.