Property Taxation in Cyprus – Transfer Fees, VAT, and Annual Taxes (2025)
A complete guide to property taxation in Cyprus: transfer fees, VAT, stamp duty, and local property taxes. Updated for 2025 to help buyers, investors, and professionals manage costs effectively.
Property Taxation in Cyprus – Complete 2025 Guide
Taxes and fees are an unavoidable part of property transactions in Cyprus. Understanding the tax structure ensures buyers, investors, and professionals can budget effectively and avoid unexpected costs. This guide provides a detailed breakdown of all relevant taxes and charges associated with property ownership and transfers in Cyprus.
Overview of Property Taxes in Cyprus
The Immovable Property Tax (IPT) was abolished in 2017, simplifying the tax landscape. Today, the key taxes and fees linked to property ownership and transfer are:
• Transfer fees.
• Stamp duty.
• Value Added Tax (VAT).
• Local municipality and community taxes.
The treatment of taxes may differ for residents and non-residents, but the general structure applies uniformly to all buyers.
Transfer Fees
Transfer fees are payable to the District Land Registry when the property is registered in the buyer’s name. The fee is calculated on the market value of the property at the date of transfer:
• 3% on the first €85,000.
• 5% on the next €85,000–€170,000.
• 8% on any amount above €170,000.
If VAT has been paid on the purchase, no transfer fees are payable. In other cases, reductions of up to 50% may apply.
Value Added Tax (VAT)
The standard VAT rate in Cyprus is 19% and applies to most new properties. A reduced rate of 5% applies to first-time buyers purchasing their primary residence, provided specific conditions are met. This reduced rate applies on the first 130 square metres of a property, while the balance is taxed at the standard rate. Renovated properties or resales generally fall outside VAT, but buyers should confirm before purchase.
Stamp Duty
Stamp duty is payable when the sale agreement is signed and is calculated on the contract value:
• 0% on values up to €5,000.
• 0.15% on values from €5,001 to €170,000.
• 0.20% on values above €170,000.
The maximum stamp duty payable is capped at €20,000. Payment must be made within 30 days of signing the contract to avoid penalties.
Local Property Taxes
Although the national Immovable Property Tax has been abolished, municipalities and local councils still levy property-related charges. These typically include refuse collection, sewerage, and other community services. Charges vary depending on the local authority and are usually calculated based on the 2013 property valuation. Annual bills are modest compared to other EU countries but must be paid to avoid penalties.
Capital Gains Tax (CGT)
Capital Gains Tax is imposed at 20% on profits from the disposal of immovable property in Cyprus. Exemptions include:
• Profits from the sale of a primary residence (up to €85,430 under certain conditions).
• Transfers due to inheritance.
• Gifts between family members.
The acquisition cost is adjusted for inflation and certain improvements to reduce taxable gains.
Double Taxation Treaties
Cyprus has signed more than 65 double taxation treaties (DTTs) with countries worldwide. These treaties ensure that income and capital gains are not taxed twice, making Cyprus attractive to international investors. Countries with treaties include the UK, most EU states, Russia, China, and Middle Eastern nations.
Case Study
A buyer in Limassol purchased a €400,000 property and qualified for the reduced 5% VAT rate as a primary residence. This saved the buyer approximately €38,000 compared to the standard VAT rate, highlighting the importance of understanding applicable tax benefits.
Practical Tip
Always confirm whether VAT applies to your property purchase. This determines whether transfer fees will be payable and directly impacts your budget.
Internal Links
• /title-deeds-in-cyprus/
• /mortgages-in-cyprus/
• /sale-agreements-cyprus/
• /risk-management-cyprus-real-estate/
External Links
• Cyprus Tax Department – https://www.mof.gov.cy/
• PwC Cyprus Tax Facts – https://www.pwc.com.cy/
• European Commission VAT Guide – https://taxation-customs.ec.europa.eu/