Property Transfer Fees in Cyprus

Learn about transfer fees, stamp duty, and VAT when buying property in Cyprus. Detailed guide with examples, exemptions, and buyer scenarios. Transfer fees are payable to the Department of Land and Surveys when ownership of property is registered in the buyer’s name. These fees are calculated based on the property’s market value at the date of purchase.

How Cyprus Transfer Fees Are Calculated

• 3% on the first €85,000 of the property’s value.
• 5% on the next €85,001–€170,000.
• 8% on any amount above €170,000.
• Example: For a property worth €300,000, transfer fees amount to around €13,600.
• If VAT has been paid on the property, no transfer fees apply.
• If no VAT is paid, transfer fees are reduced by 50%.

Cyprus Stamp Duty on Property Contracts

• Stamp duty is payable within 30 days of signing the Sales Agreement.
• Rates are calculated as follows:
– 0% on the first €5,000.
– 0.15% on €5,001–€170,000.
– 0.2% on amounts above €170,000.
• Maximum cap of €20,000 applies.
• Stamp duty ensures contracts are legally valid and enforceable in Cypriot courts.

Cyprus Value Added Tax (VAT)

• VAT applies only to new properties sold by developers.
• Standard VAT rate is 19%.
• A reduced rate of 5% applies for first-time buyers using the property as their primary residence, on the first 200 sqm.
• Remaining square meters are taxed at 19%.
• Resale properties are exempt from VAT.

Case Study: First-Time Buyer in Nicosia

A Cypriot couple purchased a new 180 sqm apartment for €220,000. They paid 5% VAT on the first 200 sqm (full apartment covered) and no transfer fees. Stamp duty amounted to around €340.

Case Study: Foreign Investor Buying Resale Villa

A British investor bought a €400,000 resale villa in Paphos. No VAT applied, so transfer fees were payable at a reduced 50% rate, around €9,000. Stamp duty was capped at €20,000 maximum but calculated at around €700.

Checklist of Purchase-Related Taxes

1. Confirm if VAT applies (new vs. resale property).
2. Calculate transfer fees if applicable.
3. Pay stamp duty within 30 days of contract signing.
4. Budget for legal and registration costs.
5. Retain receipts for compliance and resale purposes.

FAQs on Transfer Fees, Stamp Duty, and VAT

Q: Do I pay both VAT and transfer fees?
A: No, if VAT is paid, transfer fees are exempt.

Q: Are resale properties subject to VAT?
A: No, VAT applies only to new properties.

Q: What happens if stamp duty is unpaid?
A: Contracts may not be legally enforceable.

Q: Are foreign buyers treated differently?
A: No, tax rules apply equally to locals and foreigners.

Q: Can transfer fees be negotiated?
A: No, they are fixed by law, though reductions apply if VAT is not charged.

Final Recommendations

Buyers in Cyprus should carefully assess whether VAT, transfer fees, or both apply to their property purchase. Understanding these costs helps avoid surprises and ensures compliance with Cypriot property law.