Transfer Fees and Stamp Duty in Cyprus

In-depth guide to transfer fees and stamp duty in Cyprus. Covers rates, exemptions, calculation, case studies, checklists, and FAQs. When purchasing property in Cyprus, buyers must account for both transfer fees and stamp duty. These taxes vary depending on whether VAT has been paid on the property and the declared purchase price.

Transfer Fees Explained

• Charged by the Department of Lands and Surveys when transferring property title.
• Rates: 3% on first €85,000; 5% on €85,001–€170,000; 8% on values above €170,000.
• Exemption: No transfer fees if VAT was paid on purchase.
• Reduction: 50% discount on transfer fees for properties without VAT.
• Based on higher of market value or declared contract price.

Stamp Duty Explained

• Payable on the contract of sale before submission to the Land Registry.
• Rates: 0% on first €5,000; 0.15% on €5,001–€170,000; 0.2% on amounts above €170,000.
• Maximum cap of €20,000.
• Must be paid within 30 days of signing the contract.

Legal Obligations and Reforms

• Stamp duty is mandatory for contract registration.
• Transfer fees must be settled before the title deed transfer.
• Recent reforms introduced discounts and exemptions to encourage investment.
• The Tax Department audits declared values to prevent under-declaration.

Case Study: Resale Property in Larnaca

A buyer purchased a resale apartment without VAT:
• Transfer fees are applied at a reduced 50% rate.
• Paid stamp duty on contract value.
• Total additional cost: 6% of the property price.

Case Study: New-Build with VAT in Limassol

A buyer purchased a new-build villa with VAT included:
• Exempt from transfer fees.
• Paid only stamp duty.
• Significant savings compared to resale property.

Checklist for Transfer Fees and Stamp Duty

1. Confirm if VAT applies to property.
2. Calculate transfer fees based on property value.
3. Apply for a 50% reduction if eligible.
4. Calculate stamp duty according to contract value.
5. Pay stamp duty within 30 days.
6. Budget for 3%–8% of the purchase price in taxes.

FAQs on Transfer Fees and Stamp Duty in Cyprus

Q: Do new properties with VAT require transfer fees?
A: No, transfer fees are waived if VAT applies.

Q: How are transfer fees calculated?
A: Based on the higher of market value or contract price.

Q: What is the deadline for stamp duty?
A: 30 days after signing the contract.

Q: Can transfer fees be appealed?
A: Yes, if market valuation is disputed.

Q: Is under-declaring property value common?
A: It is illegal and subject to penalties.

Final Recommendations

Transfer fees and stamp duty form a significant part of property purchase costs in Cyprus. Buyers should budget accordingly, seek legal guidance, and ensure timely payments to avoid penalties.