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Cyprus Property Tax & VAT

 It is important to be aware of the taxes involved in foreign property purchase. Below is a general guide to the taxes associated with property investment in Cyprus.

Immovable Property Tax

The annual immovable property tax is imposed on the market value of the property as at 1st January 1980 and applies to the immovable property owned by the taxpayer on 1st January each year.

The Immovable Property tax is levied on companies and individuals that own immovable property with value in excess of €170,860 (CY£100,000) at 1st January 1980 market values. The rates of immovable property are:

2.5% up to €427,150 (CY£250,000)
3.5% over €427,150 (CY£250,000)
4% over €854,300 (CY£500,000)

Transfer Fees

These are payable by the purchaser when the property is registered in their name at the District Land Offices. They are based on the market value of the property on the day of purchase.

The rates applied are:

3.0% on the first €85,000

5.0% on €85,00 €170,000

8.00% over €170,000

Immovable Property Tax

The annual immovable property tax is calculated on the market value of the property as at 1st January 1980 and is payable by the owner of the property.

Market value of property (€)
 Annual Property tax (%)
 
up to 170,000 (€)
 exempt
 
170,001 to 425,000 (€)
 2.5 (%)
 
425,001 to 850,000 (€)
 3.5 (%)
 
over 850,000 (€)
 4.0 (%) 
 
Capital Gains Tax

Capital Gains Tax is payable upon disposal of a property. The first €17,086 for each person is exempt. The rate payable is 20%. The gain is the difference between the sales proceeds and the original cost of the property.

The gain is the difference between the sales proceeds and the original cost of the property. In the case of a property which was purchased before 1/1/1980, the gains are the difference between the sales proceeds and the market value of the property as of 1/1/1980.

The seller is entitled to a further allowance regarding the transfer fees paid, inflation rate per year and the cost of any additions made to the house.

Gains from the disposal of a private residence are exempt up to € 85.430,07 in total if the owner resides in it continuously for at least five years prior to disposal.

Gains from the disposal of a dwelling house are exempt up to € 85.430,07 in total if the owner resides in it continuously for at least five years prior to disposal

Stamp Duty

The purchaser is liable for the payment of stamp duty on the purchase price of the property at the rate of € 1.5 per thousand up to € 170.860,14 and thereafter at the rate of € 2.0 per thousand.

This should be paid within 30 days from signing of the contract of sale.

For example if the purchase price is € 256,290.22

First € 170.860,14  1.5‰  € 256.29
Next € 85.430,08    2.0‰  € 170.86
                                    Total € 427.15

Estate Duty

Estate Duty tax has been abolished as from the first of January 2000 (Statute No.78(1)/2000).

Local Authority Taxes & Rates

A rough guide could be approximately € 85 - € 260 per year depending on the size of your property.

This tax is for refuse collection, street lighting, sewerage, etc.

The basic utilities, electricity, water and telephone are payable individually in accordance with the consumption and based on a meter reading.

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