Buying a Home in Cprus

Buying a property in Cyprus is very similar to that in the UK. When you have found your new home you will be required to provide a deposit of between €2,000-5,000 to reserve the property. In Cyprus, unlike the UK, this process is legally binding thus avoiding further third-party interest. Signing the contract, can sometimes be completed very quickly (a few days is possible) but normally the process takes about 4-6 weeks. At this stage you will be required to pay around 30% of the value of the property; the remaining sum is paid in stages according to the terms agreed with the developer. With a resale, 10% is paid on exchange of contracts, the balance payable upon completion, again within about 4-6 weeks.

Having signed a contract it is necessary that foreign buyers seek the approval of the Council of Ministers in order to acquire immovable (freehold) property. This is a routine procedure controlling issues set by government. Approval is not guaranteed but refusal for a UK citizen is almost unheard of.

The immovable Cyprus property tax is paid by all owners of immovable property situated in the Republic. Its rate is based on the value of the property as it was valued by the Land Registry Office on 1st January 1980. Therefore, as it stands now, a home's taxable value is much lower than its actual market value on the date of its acquisition, which is the date of the Purchase Agreement's signing.

In Cyprus, property Tax is calculated according to the following rates:

Value of property as at 01/01/1980Tax Rate
Up to €170,800Exempt
€170,801 to €427,000€4.27 per €1,708
€427,001 to €854,000€5.98 per €1,708
Over €854,000€6.83 per €1,708

Stamp Duty

It is recommended that a Purchase Agreement is always stamped for two reasons:

  • a) The Purchaser may deposit the Purchase Agreement with the Land Registry Office to protect his or her interest. If the Purchase Agreement is not stamped it is not accepted by the Land Registry Office.

  • b) For the Purchase Agreement to stand as a legal document before Cypriot law. In Cyprus, stamp duty is due within two months from the time of signing the Purchase Agreement, and is usually paid by the Purchaser.

Cyprus stamp duty is levied at the rate of 0.15% for current property values up to 170,800, and 0.2% for current property market values above €170,800.

For example, if a home's value is €200,000 in Cyprus, stamp duty is calculated as follows:

€170,800 x 0.15% = €256.20

€29,200 x 0.2% = €58.40

Total Stamp Duty payable in this case is : €314.60

Property Transfer Tax

In Cyprus, transfer tax is levied upon the transfer and registration of the property into the name of the purchaser. The transfer tax is based on the market value of the property at the time of purchase, which is determined by the Cypriot Land Registry Office.

Value of propertyTax Rate
Up to €85,4003%
From €85,401 to €170,8005%
€170,800 and over8%

Let us give you an example in order to understand how the transfer tax system works:

Let's assume a house is purchased by you for €200,000, and this amount is accepted by the Land Registry Office as the market value as well. The calculation of transfer taxes is as follows:

€85,400 @ 3% = €2,562

€85,400 @ 5% = €4,270

€29,200 @ 8% = €2,336

Total Transfer Tax payable €9,168

The same computation also applies if the purchaser is a limited liability company. The transfer fees can be reduced if you purchase the house jointly with your wife or husband.

In this case the computation is made as follows:

The home's value (€200,000), is broken down into two €100,000 increments (1/2 shares)

€85,400 @ 3% = €2,562 (partner 1 share)

€14,600 @ 5% = €730 (partner 1 share)

€85,400 @ 3% = €2,562 (partner 2 share)

€14,600 @ 5% = €730 (partner 2 share)

Total Transfer Tax payable €6,584

The Joint-Purchase approach provides a transfer tax saving of €2,584 on a €200,000 property purchase

Legal Fees

(including search fees and the application to the Council of Ministers) usually around €1,000 2,000.

Running Costs

These take into account services like electricity, water, sewerage and in the case of a community development the service charge for the maintenance of the common area, pool etc. Generally the annual running costs will be in the region of €600 for a Villa and 800 for a community home. Of course these figures can vary subject to individual usage. In addition there is an annual tax Immovable Property Tax based on the property value which again operates on a sliding

Total Purchase Costs

It is difficult to arrive at total costs due to the impact of the sliding scales, but as a 'rule of thumb' we would suggest that costs will be approximately 5% of the purchase price for a property valued at €100,000 up to 8% for a property valued at €1,000,000

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