Useful Information
Compared to many other countries the process of purchasing property in Cyprus is very simple and very quick. All properties sold through Cyprus Dream Homes are freehold.
Existing regulations allow non-Cypriot buyers to acquire only one property if they are non permanent residents of Cyprus. After joining the E.U., European buyers that are permanent residents can purchase as many properties as they wish.
PERMISSION FROM THE COUNCIL OF MINISTERS
Non-Cypriots are entitled to buy property. To transfer the property into their name, permission needs to be granted from the Council of Ministers if they are non permanent residents. A written application must be submitted on behalf of the purchaser after the agreement is signed. At Cyprus Dream Homes we can take care of all the paper work involved on your behalf. The cost for you will be 400. The permission is always granted as long as the applicants have no criminal record in their own country or in Cyprus. In the meantime, purchasers may take possession of the property.
STAMP DUTY
After the sale agreement is signed the stamp duty must be paid. The purchaser is liable for the payment of the stamp duty, which must be paid within 30 days of the signing. The rate of the stamp duty is 2.56 Euros per one thousand and seven hundred Euros to the value of 170,000 thereafter the rate is 3.41 per one thousand and seven hundred Euros.
For example if the purchase price is 272,500:
| The first 170,000 |
1.5 |
= 255 |
| Next 102,500 |
2.0 |
= 205 |
| |
Total |
= 460 |
TRANSFER FEES
The purchaser has to pay the following transfer fees to the Department of Land and Surveys for the property acquired on the day the transfer will take place and the property will then be registered in his/her name. The fees are charged on the property's market value at the date of purchase.
| Value of property Euros |
Transfer fee rate (per hundred %) |
| Up to 85,000 |
3 |
| From 85,000 - 170,000 |
5 |
| From over 170,000 |
8 |
| |
| For example, if the purchase price is 162,000
| The first 85,000 |
= 2,550 |
| Next 77,000 |
= 3,850 |
| Total |
6,400 |
Should the purchase be made in joint names (provided the price is more than 85,000) the effective value for calculation is halved.
For example if the purchase price is 162,000
| The first 81,000 |
= 2,430 |
| 81,000 |
= 2,430 |
| Total |
4,860 |
MORTGAGE AND FINANCE
Commercial banks in Cyprus offer mortgage facilities for purchase of property. The loan can be obtained in foreign or Cypriot currency. The amount of the mortgage ranges from 60%-80% of the value of the property. The repayment period is up to 35 years provided that the sum of the customer's age and the duration of the loan will not exceed 70 years.
IMMOVABLE PROPERTY TAX
The immovable property tax is based upon the value of the property.
Value of property Annual Property Tax Euros () - per thousand 0/00
Up to 170,000 Exempt
170,001 to 425,000 2.0
425,001 to 850,000 3.0
Over 850,000 3.5
Immovable property tax is based upon the value of property in 1980, which is much lower than the current market value.
OTHER PROPERTY TAXES AND RATES
Taxes paid to the Municipality cover refuse collections, street lights, sewerage etc. At 100 - 260 annually.
UTILITIES:
Utilities such as electricity, water and telephones are payable in accordance with the consumption.
TAX ADVANTAGES:
If you are a pensioner, Cyprus has a wide network of double tax treaties. If the country from which your pension originates is a country with which Cyprus has a double tax treaty and you become a resident of Cyprus, then you can receive your pension gross (no deduction of tax) and pay tax in Cyprus at only 5% after the first 8,500.
Cyprus has conducted treaties for the avoidance of double taxation with the UK, USA, Yugoslavia, Sweden, Russia, Romania, Austria, Bulgaria, China, Canada, Czech Republic, Slovakia, Denmark, Greece, Germany, France, Hungary, Ireland, Italy, Kuwait, Norway and Poland.
For example, United Kingdom citizens may take advantage of the double taxation treaty existing between the UK and Cyprus. This enables you to receive your pensions and investments income in Cyprus FREE of the UK withholding tax. This treaty is unique to Cyprus since it includes both public and private sector pensions.
Furthermore, Cyprus taxes the assets of expatriates only on a remittance basis. Many expatriates can, therefore, keep assets growing free of tax in an offshore bank, investments or trust, and simply bring into Cyprus what they need. The remittance system compares extremely well with the more common world arising tax system used in many other countries.
ESTATE DUTY:
Estate duty was abolished as of 1st January 2000. Residents domiciled in Cyprus are exempt from estate duty from worldwide asserts.
VALUE ADDED TAX
VAT in Cyprus is 15% and it applies to goods and services. Rental income, resales and land are currently excluded from VAT, as are medicine, food items and other basic essentials. 15% VAT is applicable on new properties, off plan or properties under construction. 10% of the VAT paid can be claimed back if the property is your permanent home in Cyprus and has not been rented out.
LOCAL AUTHORITY TAXES AND RATES
A rough guide could be approximately 100 - 260 per year depending on the size of our property. This tax pays for refuse collection, street lighting, sewerage etc.
The basic utilities, electricity, water and telephone are payable individually in accordance with the consumption and a based on meter reading.
CAPITAL GAINS TAX
On disposal of the property, capital gains tax will be payable at the rate of 20% on the gain, with the first 17,000 being exempt for each person. There is also an indexation allowance.
On top of this allowance, 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.
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