Immovable Property Tax payable to the Tax Department
Immovable Property Tax (IPT) is abolished in 2017.
Property Tax payable to Communities and Municipalities
This tax is levied by the municipality of the area where the property is located for street lighting, garbage collection, sewage system cleaning and other services.
Stamp duty is paid by the purchaser of a property within 30 days after signing of the sale contract in the Tax office. It is calculated on the value of the purchase stated in the sale agreement and remains unchanged at the rate of:
€0 to €5,000 – zero
€5,001 to €170,860 – 0.15%
Greater than €170,860 – 0.2%*
* Capped at a maximum of €20,000.
Property Transfer Fees
The Property transfer fees are payable in the Land Registry when transferring the Title deeds to the buyer's name. These fees are calculated as follows:
3% on the purchase price up to €85.430
5% on the purchase price from €85.430 to €170.860
8% of the price over € 170.860
For example: if the price of the property is € 300,000, then for the first € 85.430 the fees will be €2.562 (3%), for the following € 85.430 - €4.271 (5%), for the remaining cost of € 129.140 - €10.331. Totally, the transfer fees will amount to €17.200.
When registering a property on two or more owners, the transfer fees are reduced, since the taxable value for each owner is proportionally less.
In 2016, the Government of Cyprus adopted innovations related to the Property Transfer Fees:
(a) If VAT was paid on the purchase price of the property that usually happens when buying a new property, no Property Transfer Fees are payable.
(b) If VAT was not paid on the purchase price of the property that mostly related to resale properties, the Property Transfer Fees are reduced by 50%.
However if the Director of the Land Registry considers that the price stated on the contract of sale does not reflect the market value of the property at its date of purchase he may, at his discretion, charge the full Property Transfer Fees based on the Land Registry’s assessment of the market value of the property at its date of sale less the price stated on the contract of sale.
Capital Gains Tax
When you sell a property in Cyprus, even though it may be your main residence, you are liable to pay Capital Gains Tax at the rate of 20%. The capital gains tax is the tax imposed on the net profit that proceeds from the sale. Net profit means the profit of the sale after deducting the following:
- Transfer fees
- Registered Estate Agents fees for the sale of the property
- Any extras done on the property
- Inflation etc.
- €17,086 per person for the first sale or up to €85,430 if the Seller has been legally residing in the property for more than 5 years, or up to €25,629 if the disposal is made by a farmer and it relates to agricultural land.
The maximum deduction granted cannot exceed €85,430.