After purchasing a property in Cyprus, there are various taxes and fees that need to be paid. Below is a detailed introduction for those who may need to save this information for future reference.
I. Mandatory Taxes and Fees
1. Municipal Tax: Approximately 50–100 Euros per year, which may vary depending on the city and district.
2. Refuse Collection Fee: Approximately 170–250 Euros per year, which may vary depending on the city and district.
3. Sewerage Fee: Approximately 50–100 Euros per year, which may vary depending on the city and district.
4. Property Management Fee: Starting from 20 Euros per month, charged quarterly based on the standards of the property's amenities.
II. Optional Fees
Property Insurance: Approximately 500 Euros per year and up (optional, but recommended).
III. Rental Income Tax
If you rent out your property in Cyprus, you are only required to pay a 19% tax on annual rental income exceeding 20,000 Euros. Additionally, there are extra deductions and government subsidies available. If you file a tax return, after deducting these subsidies and allowances (which can reduce the tax payable by approximately 25%), the effective tax rate will be lower than 19%. Cyprus offers low tax rates while also providing government subsidies.
IV. No Property Tax (Immovable Property Tax) in Cyprus
Cyprus completely abolished the Immovable Property Tax effective January 1, 2017. Currently, after purchasing a property, owners hold permanent title and are not required to pay annual immovable property tax to the government.
V. Cyprus Capital Gains Tax
For property owners who purchased real estate after January 1, 2017, a tax of 20% is levied on the capital gains from the sale of the property. Costs arising from property transactions, such as Value Added Tax (VAT), transfer fees, and stamp duty, are borne by the buyer.
Cyprus Property Holding Costs and Payment Methods
Water Bills
Upon taking possession of the property, you need to visit the local water board to transfer the account into your name. You can also provide your bank account details to the water board for registration, allowing future water bills to be automatically deducted from your bank account.
Water bills are settled every three months. Customers who have not set up a bank link can pay at the bank or the water board after receiving the bill (suitable for long-term local residents).
Electricity Bills
Upon taking possession of the property, you need to visit the local electricity authority to transfer the account into your name. You can also provide your bank account details to the electricity authority for registration, allowing future electricity bills to be automatically deducted from your bank account. Electricity bills are settled every two months.
Customers who have not set up a bank link can pay at the bank or the electricity authority after receiving the bill (suitable for long-term local residents).
Refuse Collection Fee and Municipal Tax
After taking possession of the property, you need to pay the annual refuse collection fee and municipal tax at the end of each year. The municipality will mail the payment statement to your home at the end of each year.
Similarly, you can set up a bank link at the municipal office when taking possession, allowing for automatic annual deductions from your bank account.
Sewerage Fee
Currently, this fee is paid separately only in Larnaca; in other cities, the sewerage fee is bundled with the water bill, meaning it is already included in the water charges.
In Larnaca, the sewerage fee is paid once a year. At the end of the year, the sewerage board will mail the payment statement to your home. You can pay it at the sewerage board when you visit the country every two years.
This fee cannot currently be linked to a bank account. Generally, a property worth 300,000 Euros incurs an annual sewerage fee of about 50 Euros. If not paid on time, a small late fee may be incurred, which is not significant (e.g., a dozen Euros per year).
Property Management Fee
From the time you take possession, you need to pay property management fees regularly to the developer or the property management company under the developer, usually every six months. Payments can be made by transferring funds to the developer's bank account according to the payment statement provided by the developer.
Note: This article is reprinted from the internet and may differ from actual fee information. For detailed information regarding Cyprus property taxes, please consult the customer service team at WorldWay.