Yet, there is no VAT if you are buying resale property (meaning, purchased from a private individual).
On the other hand, for a new property, a standard VAT rate (19%) applies. Although, a reduced VAT rate ( 5%) is applicable when buying a new residential property.
Reduced VAT (5%)
- First, the property is used as the primary and permanent residence (for the next 10 years). Important to note, it is NOT allowed to rent/ lease the property for 10 years.
- Second, the applicant has not bought any other residence with a reduced VAT rate (in Cyprus).
- Third, the buyer must be over 18 years old (therefore, legal entities are excluded).
Equally important, the reduced VAT (5%) is applied to the first 200 square meters of the property. And on the remaining square meters, the standard rate (19%) is imposed.
But if the full 19% VAT has been paid, the purchaser is allowed to rent/ lease the property.
2. Transfer Fees
Click this link to the official Transfer Fees Calculator by the Cyprus Department of Lands and Surveys to calculate the exact transfer fees amount.
The amount is based on the market value of the property, moreover:
- If VAT is applicable then NO transfer fees are payable.
- If a property is NOT subject to VAT the transfer fees are reduced by 50%
- If the property is purchased by 2 (or more) people, this tax drops considerably.
The transfer of ownership is an easy registration process. The prescribed application form N270 should be completed and submitted in person together with:
- Title Deeds (registration certificate) of the property.
- Copy of permission to buy particular property from the Council of Ministers.
- Written confirmation from the Central Bank of Cyprus that purchase is done by foreign funds.
- Evidence of payment of all property taxes (sundry municipal/ local authorities taxes and sewerage tax).
- The contract of sale is duly stamped.
3. Stamp Duty
After the contract of sale is signed, the purchaser will need to pay stamp duty within 30 days of signing the contract of sale.
Specifically, depending on the purchase price the following rates apply:
|VALUE OF THE PROPERTY||RATE (%)|
|The first €5.000||0|
|Between €5.001- €170.000||1.5%|
If an individual or a couple buys in their joint names a house for €700,000, the taxes will be as follows:
- Transfer taxes will be: €24,600
- Stamp Duty: €1,308
- Total : €25,908
Couple (buying on joint names):
- Transfer taxes will be : €21,200
- Stamp Duty: €1,308
- Total: €22,508