Costs associated with the acquisition of property in Cyprus

Stamp duty

A stamp duty of 0.15% (£1.50 per £1.000) is levied on contracts with a value of up to £100.000. For any amount thereafter, the rate is 0.2% (£2 per 1.000). The stamp payable by the purchaser within 30 days of signing the contract.

Transfer fees

Property transfer fees are payable by the purchaser and due when the title deeds are issued and transferred to name usually after 3 years.

Property Value (£)	Transfer Fees (%)
Up to 50.000	3
50.000 – 100.000	5
Over 100.000	8

For example if the purchase price is £130.000 the transfer fees are calculated as follows:

Property Value (£)	Transfer Fees (%)
The first £50.000 @ 3%	1.500
The next £50.000 @ 5%	2.500
The last £30.000 @ 8%	2.400
Total Transfer Fees	6.400

A tip for saving money on transfer fees: Should the purchase be made in joint names, the effective value for calculation is halved.

For example if the purchase is £130.000 and the purchase is made in joint names you can save £1.900 transfer fees are calculated as follows:

£130.000/2 = £65.000 for each purchaser

Property Value (£)	Purchaser A	Purchaser B	Total Transfer Fees (£)
First £50k	1.500	1.500	3.000 @ 3%
Next £15k	750	750	1.500 @5%

Immovable property tax

The registered owner is liable for this annual tax, which based on the value of the property as at the 1981.

Property Value (£)	Annual Tax (%)	£ per £1.000	Accumulated Annual Tax (£))
Up to 100k	0	0	0
100k-250k	0.25	2.5	375
250k-500k	0.35	3.5	1.250
Over 500k	0.4	4	-

Capital gains tax

Capital Gains Tax is levied at the rate of 20% on gains from the disposable of immovable property or the disposal of shares of companies the assets of which consist mainly immovable property.

However, for individuals, the total Capital Gains Tax paid is usually minimised for the following reasons:

• The cost of acquisition used for the calculation of the profit also includes any payments made for the improvement of the property or for any additions on the property as well as any interest paid for the acquisition.

• The acquisition cost used for the calculation of the profit is adjusted to take into account the inflation rate.

• The following lifetime allowances are given to individuals:

• Net capital gains up to £10,000 earned from the disposal of any property tax exempt.
• Net capital gains up to £50,000 earned from the disposal of a family residence (subject to certain conditions) are tax exempt.

The above allowances are not available separately. An individual claiming a combination of the above allowances in only allowed a maximum allowance of £50.000.

VAT on property prices after May 1st, 2004.

As of May 1st 2004 VAT is added on the price of new properties as follows:

• First time buyers have to pay 5% VAT.

• All other buyers have to pay 15% VAT.

However all properties for which a valid application for Planning Permit was submitted at the Town Planning Department before the 1st of May 2004 are fully exempted from VAT.

As a result, there is heavy demand for all properties that are not affected by the VAT addition and serious buyers are advised to expedite their visit to Cyprus to purchase such properties.