WHAT YOU NEED TO KNOW ABOUT BUYING A PROPERTY IN CYPRUS
– Choice of property
– Sign purchases agreement
– Open Bank Account in Cyprus
– Registration of the contract of sale in the Land Registry
– Apply for permission from the Council of Ministers in order to acquire property in Cyprus
– Apply for a Residential Visa
– Transfer of title deed
STAMP DUTY (one-off payment)
Before the contract is lodged in the land registry office for specific performance purposes, it needs to be stamped by the tax office.
Property Value Percentage
Property Value Percentage
First €170,860 EURO 0.15%
Above €170,860 EURO 0.20%
Example:
Buying a property for EURO 250,000
First 170,860 Euro – 0.15% = 256.29 Euro
Next 79,140 Euro – 0.20% = 158.28 Euro
The stamp duty paid is Total 414.57 Euro
Stamp duty is to be paid within one month from the date of signing the contract of sale.
TAX OF REGISTRATION OF THE OWNERSHIO OR TRANSFER FEE (one-off payment) . Until 31.12.2023 50% discount (1.5%, 2.5%, 4%)
Transfer tax fees based on the value of the property, are payable by the buyer and are as follows:
Property values in Euro % Transfer Fee €
Up to €85,000 3% €2 550
From €85,000-€170,000 5% €4 250
Over €170,000 8%
VAT
The usual VAT rate is 19%.
Reduced VAT rate is granted when the following requirements are fulfilled:
– the buyer has no other property in Cyprus or has never enjoyed the VAT refund in the past
– the property that he/she is buying is new
– it will be used as the primary residence in Cyprus
– Only applies to individuals (not companies), 18 years of age and over
The reduced rate of 5% applies to the first 200 sq.m. of residential property,
The VAT reduction is only applicable to properties smaller than 275 sq.m.
Example of VAT calculation
For instance, the area of the property is 300 sq.m. and price – EUR1.000.000
The following VAT rate will apply
1.000.000 x 5% x 200/300 = 33.334, plus
1.000.000 x 19% x 100/300 = 63.334
The amount of VAT in this example is 96.667 and the total price of the property – EUR1.96.667.
List of documents to be submitted for obtaining reduced VAT rate
An applicant applying for a reduced VAT rate submits an application along with a declaration stating that he/she has purchased no other property in Cyprus using the reduced VAT rate to VAT Department. When the applicant is married, a spouse shall also submit an application along with a declaration. The application shall be supported by the following documents:
- Contract of sale for the property
- Copy of passport
- Marriage certificate Copy of spouse’s passport
- Architectural plans for the property
- Certified copy of planning permit for construction
- Declaration certifying the appropriate size of the immovable property is endorsed by an architect or a civil engineer
- Documentary evidence that the applicant uses the property as his/her place of residence in Cyprus such as:
- Copies of electricity bills
- Copies of water bills
- Copies of phone bills
- Copies of local and municipal tax bills
- Any other documents certifying that this property is used by the applicant for its intended purpose as a main place of residence in Cyprus.
The above listed documents shall be submitted within six months from taking possession by the applicant and form a part of the Application process for using a reduced VAT rate.
