VAT (VALUE ADDED TAX) is a one-time payment made by the purchaser of new properties and land. Land and new real estate purchases are subject to a 19% VAT.
A reduced rate of 5% can be applied to the purchase of residential property if the following conditions are met:
The applicant uses the property as his primary and permanent residence in Cyprus (minimum for 10 years). Non-Cyprus residents have no time limit to stay in the country.
The applicant has no other residence in Cyprus with a reduced VAT rate.
The applicant must be an individual over the age of 18. The VAT reduction does not apply to legal entities.
A reduced VAT property cannot be rented out or used for any other economic activity.
A buyer pays 19% VAT and then applies for a refund. The application must be submitted before the applicant takes possession of the property. If the property is still under construction (off-plan), the application can be submitted at any time during the building process.
The reduced VAT rate of 5% applies to the first 200 square meters of property area. In the case of large families, the total area can be increased.
If a VAT-reduced property is sold or rented out before the 10-year period is up, the previously effected VAT refund must be returned to the state for the remaining years.
VAT is not applicable to resale real estate.
The property ownership transfer fee is a one-time payment made by the property buyer. There are no transfer fees for VAT-taxable properties.
Rates: 3% for property values ranging from €0 to €85,000
5% for property values ranging from €85,000 to €170,000
8% for properties worth more than €170,000
The amount of the property ownership transfer fee is reduced by 50%.
Transfer fee calculator is available on the website of Ministry of Interior, Department of Lands and Surveys, here https://portal.dls.moi.gov.cy/en-us/Pages/CalculateTransferFees.aspx
Stamp Duty is a one-time payment made by the purchaser of real estate or land. Stamp duty must be paid within thirty days of the date of co-signing the property acquisition contract in Cyprus in order for the transaction to be registered with the Inland Revenue Department.
Rates: 0% for properties worth up to €5,000
0.15% for property values ranging from €5,000 to €17,860
0.2% for properties worth more than €170,860
The maximum amount of stamp duty payable per agreement is €20.000.
In Cyprus, there is no immovable property ownership tax.
Municipality tax is an annual tax paid by property owners ranging from €85 to €500 per year for garbage collection, sewage, lighting of common areas, and other services.
On gains arising from the sale of immovable property in Cyprus, the property seller pays Capital Gains Tax (CGT) at the rate of 20%.