Cyprus Real Estate Legal & Tax Checklist for Buyers
Key Takeaways
– Always conduct due diligence on title deeds, zoning, and permits before paying a deposit.
– Use a licensed independent lawyer — not the developer’s or agent’s representative.
– Budget for taxes & fees: VAT (up to 19%), transfer fees (3–8%), and stamp duty (0.15–0.20%).
– New builds come with VAT, resales with transfer fees — understand the difference.
– Capital Gains Tax (CGT) applies on resale profits (20%).
– Rental income is taxable if you become a Cyprus tax resident.
– A step-by-step legal & tax checklist prevents costly mistakes.
Legal Checklist for Buying Property in Cyprus
☑ Engage an Independent Lawyer: Confirm registration with Cyprus Bar Association. Avoid lawyers tied to developers or agents.
☑ Check Title Deeds: Ensure the property has clear title deeds and that the seller is the legal owner. For new builds, confirm planning and building permits.
☑ Drafting & Reviewing the Contract of Sale: Lawyer must draft or review the contract. Register it at the Land Registry within 6 months.
☑ Deposit & Escrow Arrangements: Deposits should go into a client account. Ensure refund terms are clear.
☑ Permission from the Council of Ministers (Non-EU Buyers): Required for non-EU buyers. Normally approved for one residence.
☑ Financing & Mortgage Checks: Confirm mortgage clearance on resales. For mortgaged properties, obtain a bank waiver.
☑ Registration & Transfer: Once payment is complete, register ownership at the Land Office and pay transfer fees.
Tax Checklist for Property Buyers
☑ Value Added Tax (VAT): New builds carry 19% VAT. Primary residences may qualify for 5% VAT on the first 200m². Resales are VAT-exempt.
☑ Transfer Fees: Payable when VAT does not apply, ranging 3–8%. Reduced or waived for VAT-applied properties.
☑ Stamp Duty: 0.15% on contract values up to €170,000, then 0.20% above. Maximum €20,000.
☑ Capital Gains Tax (CGT): 20% on resale profits. First €17,000 gain exempt. Exemptions for inheritance, donations, and transfers between relatives.
☑ Rental Income Tax: Progressive 20–35% if Cyprus tax resident. SDC of 3% on gross rents applies.
Comparison — New Build vs Resale vs Commercial
• New Build: VAT at 19% (5% if primary residence). Transfer fees waived when VAT is paid. Stamp duty at 0.15–0.20%. Buyers must check building permits, request a snagging list, and confirm developer reputation.
• Resale: No VAT. Transfer fees of 3–8% apply. Stamp duty at 0.15–0.20%. Confirm the seller’s mortgage clearance and title deeds before proceeding.
• Commercial: Usually 19% VAT unless exempt. Transfer fees apply if no VAT. Stamp duty 0.15–0.20%. Check zoning, business licensing, and commercial lease terms carefully.
Quick Reference — Cyprus Property Taxes & Fees
• VAT: 19% (5% on first 200m² for main residence). Applies to new builds.
• Transfer Fees: 3–8%. Exempt if VAT paid.
• Stamp Duty: 0.15–0.20% (max €20,000). Based on contract value.
• Capital Gains Tax: 20% on resale profits, with some exemptions.
• Rental Income Tax: 20–35% progressive, for Cyprus tax residents only.
Conclusion
A structured legal and tax checklist is essential for property buyers in Cyprus. For new builds, budget for VAT and check developer permits. For resales, focus on title deeds, mortgage clearance, and transfer fees. For commercial properties, confirm zoning, permits, and lease compliance. With proper legal support and awareness of taxes, buyers can minimize risk and enjoy a smooth purchase process.
Frequently Asked Questions (FAQs)
Q: Do I pay both VAT and transfer fees?
A: No. VAT applies to new builds; transfer fees apply only when VAT is not paid.
Q: Can foreigners buy commercial property in Cyprus?
A: Yes, but non-EU buyers may require special permission and must comply with zoning rules.
Q: What is the main risk for buyers in Cyprus?
A: Buying without title deeds or proper legal checks. Always confirm ownership and permits.
Q: How much should I budget for taxes and fees?
A: Allow around 10–15% of the purchase price for VAT/transfer fees, stamp duty, and legal costs.
Q: Do I need to register my purchase contract?
A: Yes. Registration at the Land Registry secures your rights against resale or mortgages.