In Cyprus, immovable property tax has been abolished as of the 1st January 2017. This constitutes a strong incentive to launch a real estate project in Cyprus.
The main immovable property taxes are listed below.
Local Property Tax
It is payable to local authorities, that is to say, to Communities and Municipalities. This tax is calculated on the Land Registry’s assessment of the 2013 value of the property.
Property Transfer Fees
Zero property transfer fees provided that the VAT was paid on the purchase price of the property. However, if the VAT was not paid on the purchase price of the property, then the property transfer fees are decreased by 50%.
Have in mind that, if the Director of the Land Registry thinks that the price indicated on the contract of sale does not represent the actual market value of the property at its date of purchase he may, at his discretion, charge the entire property transfer fees in accordance with the Land Registry’s assessment of the property market value as its date of sale less the price indicated on the contract of sale.
Capital Gains Tax
It is payable at 20% on profit derived from the disposal of property. The purchase price is adjusted for inflation by taking into consideration the cost of living index. In the case that the property was purchased before 1980, then the 1980 value stated on the Title Deed is considered as the purchase price.
Subject to certain conditions, expenses related to the acquisition and disposal of a property may be deducted, i.e. transfer fees, legal expenses etc.
Have in mind that subject to certain conditions, real estate property acquired between 16/07/2015-31/12/2016 will be exempt from Capital Gains Taxation at its disposal in the future.
VAT is not charged on:
- resale properties
- land in protected zones
- farming land
VAT is charged at the rate of 19% on:
- the first purchase of a real estate property;
- on the sale of undeveloped building land which is intended to be used for the construction of buildings;
VAT rate of 5% is imposed on the first 200m2 of the acquisition/construction of a real estate property intended to be used as the primary and permanent residence of the buyer for 10 years. VAT rate of 19% is applied to the remaining square metres.
Stamp duty is calculated on the value of the purchase price as follows:
|Purchase Price||Stamp Duty|
|Less than €5,000||0%|
|More than €170,000||0.20%|
Contact Rah Legal and launch your real estate project in Cyprus?
The multilingual team of Rah Legal is able to provide you with all the necessary legal and administrative support. Furthermore, we may give you detailed information regarding taxation and other bureaucratic matters. For more information, please contact our immovable property lawyers.