Overview of Real Estate Taxes in Cyprus

Complete guide to Cyprus real estate taxes. Covers VAT, transfer fees, stamp duty, municipal charges, and capital gains tax for buyers and investors. Purchasing property in Cyprus involves several taxes and fees that buyers must consider. Understanding these obligations is key to budgeting accurately and avoiding legal or financial complications.

Value Added Tax (VAT)

• Standard VAT rate: 19% on new properties.
• Reduced VAT: 5% for the first 200 sqm of a primary residence if the criteria are met.
• Properties over 200 sqm: Excess taxed at 19%.
• Resale properties: VAT does not apply, but transfer fees may be due.

Property Transfer Fees

• Payable when title deeds are transferred to the buyer.
• Rates: 3% on first €85,000, 5% on €85,001–€170,000, 8% on remainder.
• Exempt if VAT was paid on the purchase.
• Reduced by 50% for properties without VAT.

Stamp Duty

• Payable on the Contract of Sale.
• 0% on values under €5,000.
• 0.15% on €5,001–€170,000.
• 0.20% on values above €170,000.
• Maximum capped at €20,000.

Municipal and Local Property Taxes

• Annual municipal taxes: Based on 2013 Land Registry values.
• Rates vary by municipality but typically €50–€300 annually.
• Refuse collection, sewerage, and communal services may add to annual costs.

Capital Gains Tax (CGT)

• Applies to profit from property sales.
• Standard rate: 20% on gains.
• Exemptions: €17,086 lifetime allowance for individuals; €85,430 for principal residence (if lived in for 5+ years).
• Inherited properties are exempt.

Differences for Residents vs. Non-Residents

• Both residents and non-residents are subject to the same property taxes.
• Non-residents may also face double taxation in their home country unless treaties apply.
• Cyprus has 65+ double tax treaties reducing tax overlap.

Case Study: First-Time Buyer

A Cypriot couple purchases a 180 sqm apartment in Nicosia as their primary residence. They qualify for 5% VAT on the entire property, saving €20,000 compared to standard VAT.

Case Study: Foreign Investor

A British investor sells a Limassol villa purchased 10 years earlier. Profit: €100,000. After €17,086 exemption, CGT applies to €82,914, taxed at 20% = €16,582 liability.

Checklist of Real Estate Taxes in Cyprus

1. Confirm if VAT applies (new build vs. resale).
2. Budget for property transfer fees.
3. Calculate stamp duty on the Contract of Sale.
4. Factor in municipal and local annual taxes.
5. Plan for capital gains tax on future resale.
6. Check for double taxation treaties if non-resident.

FAQs on Real Estate Taxes in Cyprus

Q: Do I pay VAT on resale property?
A: No, VAT only applies to new builds.

Q: Are property transfer fees always payable?
A: Not if VAT has been paid.

Q: How are municipal taxes calculated?
A: Based on 2013 Land Registry values, set by the local authority.

Q: Do foreigners pay higher taxes?
A: No, rates are equal for residents and non-residents.

Q: Can I reduce CGT liability?
A: Yes, exemptions apply for the lifetime allowance and primary residence use.

Final Recommendations

Cyprus property buyers should budget for all taxes and fees before purchase. Professional advice ensures compliance and helps optimise tax obligations under local and international law.