Worldway Immigration Comprehensive Report: The preferential policy for property transfer fees in Cyprus, originally scheduled to end at the end of 2014, has now been extended until the end of 2016. This is a major benefit for clients choosing to immigrate to Cyprus. The specific details of the discount are as follows:
a) For new properties purchased before December 31, 2016, that are subject to VAT (properties approved after May 1, 2004), the property transfer fee is waived;
b) For new properties purchased before December 31, 2016, that are not subject to VAT (properties approved before May 1, 2004), the property transfer fee is halved, meaning only 50% is payable.
In this regard, Worldway Immigration experts would like to detail the main costs incurred when purchasing property in Cyprus to ensure you avoid unnecessary expenses.
1. Stamp Duty
a) Paid as a one-time fee
b) Payable within 30 days of signing the purchase contract
c) Charged proportionally based on the purchase price, ranging from 0% to 0.2%
2. Value Added Tax (VAT)
Since Cyprus officially joined the European Union in 2004, any property project for which a building permit was filed with the government before May 1, 2004, is exempt from VAT in property transactions;
Properties subject to VAT: For property projects with permits filed after May 1, 2004, VAT must be paid during the transaction at a rate of 19% of the purchase price;
VAT reduction: First-time homebuyers may apply to the Cyprus government to reduce the VAT portion from 19% to 5%;
3. Property Transfer Fee:
a) Payable only when processing the transfer of the title deed;
b) For new properties purchased before December 31, 2016, that are subject to VAT (properties approved after May 1, 2004), the property transfer fee is waived;
c) For new properties purchased before December 31, 2016, that are not subject to VAT (properties approved before May 1, 2004), the property transfer fee is halved, meaning only 50% is payable;
d) Property transfer fees are charged in tiers based on the total property price, ranging from 3% to 8%.
4. Immovable Property Tax
a) Payable annually on January 1st
b) Calculated based on the property value adjusted to the price levels of January 1, 1980;
c) For a property with a market value of 350,000 Euros, the estimated annual immovable property tax is approximately 390 Euros after adjusting to 1980 price levels.
5. Legal Fees for Property Purchase
Legal fees for property purchases are 1% of the total property price (net value), plus 19% VAT, totaling 1.19% of the total property price.
6. Property Insurance: 500-1000 Euros/year
7. Municipal Tax: Approximately 500 Euros/year
8. Property Management Fees:
Depending on the property type and the specific development, management fees vary, generally ranging from 100 to 1500 Euros per month. Additionally, some properties do not require property management fees.
(The above fees are for reference only; actual amounts paid shall prevail.)
