If you decide to purchase an apartment, villa, cottage or townhouse on the Mediterranean coast, you should consider not only the market value but also payments required for registration of title and further maintenance. To find out what taxes are in force in Cyprus, you can check materials on our website or contact us, P.L. Property Gallery Developers & Constructors Ltd. Our company is the biggest developer in the region. We have been working on the real estate market for 18+ years and know all the details of local legislation and taxation.
Property taxes and fees in Cyprus
The tax system in the Republic is considered very light, which attracts Russians and other foreigners to purchase houses, villas, cottages, townhouses and apartments. If you decide to purchase real estate in Cyprus, you will have to pay the following types of fees:
- Stamp duty.
- Title fee.
Keep in mind bank commissions when purchasing housing on mortgage.
This tax in Cyprus is imposed on the buyer who has signed a contract for the purchase of local real estate. The amount of stamp duty is calculated individually depending on the real estate cost. If a house, apartment or villa costs within EUR 170,860, the tax rate will be 0.151% of the price. The stamp duty for more expensive objects is 0.201% of the market value.
Taxes in the Republic of Cyprus are mostly used to cover current expenses for document flow and other transactions. The title fee is a notable example. This tax is intended to cover the cost of title re-legalization.
The title fee is only applicable if the property is registered to the owner in the Department of Lands and Surveys. To reissue title to a non-EU resident, you need to get permission from the Council of Ministers and wait for the documents to be checked at the local Land Registry Office.
Tax on the re-legalization of real estate in Cyprus to the new owner is paid in the Department of Lands and Surveys. The amount of the title fee is calculated based on the cost of the purchased property.
- 3% tax on the property worth up to EUR 85,400.
- 5% tax on the property worth from EUR 85,401 to EUR 170,860.
- 8% tax on the property worth above EUR 170,860.
If the new owner is your friend or relative, the amount of the title fee will be only EUR 50 regardless of the housing market value. To transfer the title from parents to children, one will pay a 0.2% tax. To transfer the title between spouses and other relatives, one will pay a 0.4% tax.
You will be charged not only taxes in the Republic of Cyprus when purchasing housing. If you use borrowed funds to close a deal, do not forget that the bank will charge a commission for its services. Its amount usually does not exceed 1% of the approved mortgage amount. Only unfinished construction projects are exempt from this fee. The relief is valid until the property is put into operation. In all other cases, the commission is paid when signing the mortgage contract. You may additionally need EUR 70-100 for processing documents.
A mortgage in Cyprus is granted for up to 40 years provided that a borrower is younger than 70 years old at the time of the last payment. At least a 20% advance payment is required to get a loan. The best way to get a mortgage in Cyprus is to contact a local developer. Being interested in the sale, the developer will act as a guarantor in the partner bank increasing your chances of approval.
If you would like to purchase real estate in Cyprus on mortgage, please contact experts from P.L. Property Gallery Developers & Constructors Ltd. We are the biggest developer in the region and offer a wide choice of apartments, villas, cottages, townhouses in the most developed areas.
What taxes apply to property owners in Cyprus?
As the owner of an apartment or house in the Republic, you will have to regularly pay certain state fees, including the following:
- Annual real estate tax.
- Capital gains tax.
- VAT on real estate in Cyprus.
Each of the above has its tariff and payment features.
Annual real estate tax in Cyprus
This tax is not imposed on citizens of Russia and other countries. However, it will be accrued annually when obtaining Cyprus citizenship.
Capital gains tax
If you decide to sell a property purchased in Cyprus, you will be subject to a 20% tax on the property market value. It is calculated given inflation indicators and some benefits provided to foreigners, so the tax amount will be significantly less than the declared rate.
VAT on real estate in Cyprus
19% VAT applies to the transfer or sale of new buildings. If you are planning to purchase a house or apartment as your first permanent residence in Cyprus, apply for up to 5% VAT reduction to the local authorities providing appropriate documents. However, you should understand the peculiarities of the VAT reduction in Cyprus. If the property is sold within 10 months or seizes to be your permanent residence, you will need to pay the government of Cyprus the remaining 14% tax written off under the program.
Other expenses related to real estate in Cyprus
If you own a house or apartment in the Republic, you will have to take care not only of the timely payment of taxes but also other expenses, such as:
- Electricity. The amount of payments depends on consumption, usually ranging from EUR 20 to 150 per month.
- Water. These payments are made once every 4 months and range from EUR 25 to 50.
- Sewage. Payment for this service varies from EUR 95 to 120 annually.
- Expenses on public territory maintenance. The exact amount of contributions depends on the property location. It usually varies from EUR 500 to 1,000.
If you want to ensure proper real estate management and timely payment of bills even during your absence from Cyprus, please contact experts from P.L. Property Gallery Developers & Constructors Ltd. We provide a range of services to meet all your needs.