Costs in Property Transactions in Cyprus

Learn about the hidden costs of buying property in Cyprus, including legal fees, municipal taxes, insurance, and banking charges. Avoid surprises with this guide.

Hidden Costs in Property Transactions

When buying property in Cyprus, many buyers focus on the purchase price but overlook additional expenses. These hidden costs can add 10–15% to the total transaction amount and must be carefully planned for.

Legal and Professional Fees

• Lawyer fees: Typically 1–2% of the purchase price.
• Surveyor fees: €300–€1,000 depending on property size.
• Notary and document certification charges.

Taxes and Government Charges

• Stamp duty: 0.15%–0.2% depending on contract value.
• Transfer fees: 3–8% if VAT is not applied.
• VAT: 5% (reduced for first homes) or 19% on new properties.

Municipal and Utility Costs

• Local authority taxes: €100–€300 annually.
• Refuse collection fees.
• Sewage board fees.
• Connection fees for water, electricity, and telecom services.

Ongoing Ownership Costs

• Insurance: Required by banks for mortgaged properties, typically €200–€500 annually.
• Common expenses in apartment complexes (maintenance, security, cleaning).
• Repairs, renovations, and emergency maintenance.

Banking and Financing Costs

• Mortgage arrangement fees: 1% of the loan amount.
• Currency exchange fees for foreign buyers.
• Early repayment penalties in some mortgage contracts.

Case Study: Underestimated Costs in Larnaca

In 2017, a buyer focused only on the purchase price of €200,000. They failed to account for €15,000 in legal, tax, and municipal fees, straining their budget.

Case Study: Prepared Buyer in Paphos

In 2019, a family purchasing a villa budgeted 12% above the sale price to cover all hidden costs. The transaction was smooth, and no unexpected expenses occurred.

Checklist of Hidden Costs

1. Legal fees and professional charges.
2. Stamp duty, transfer fees, or VAT.
3. Municipal and utility connection fees.
4. Annual maintenance and insurance.
5. Banking and mortgage-related fees.
6. Emergency repairs and renovations.

FAQs on Hidden Property Costs

Q: How much should I budget for hidden costs?
A: Around 10–15% of the purchase price.

Q: Are legal fees mandatory?
A: While not legally required, hiring a lawyer is strongly recommended.

Q: Do new properties carry fewer hidden costs?
A: Not necessarily—VAT and connection fees may be higher.

Q: Can I finance hidden costs with a mortgage?
A: Banks typically finance only the property price, not associated fees.

Q: What costs continue after purchase?
A: Insurance, municipal fees, and maintenance are ongoing obligations.

Final Recommendations

Hidden costs can significantly affect the true cost of buying property in Cyprus. Buyers should plan ahead, budget realistically, and always consult professionals to avoid financial surprises.