Cyprus Legal Procedures for a Re-sale.
(Existing Property)
The Cypriot legal system was established in 1875 and is fundamentally based on its English counterpart and is now considered to have one of the most sophisticated land registry systems in the world.
Taxation and Legal Fees
Cyprus is known for its tax advantages, with low rates and low associated fees. For your general guidance, we have compiled a list below of all the taxes and fees you might encounter while buying property and moving to Cyprus:
Legal fees
We advise you to retain an experienced property solicitor before signing the purchase contract. The fees are generally 1% of the purchase price, payable to the solicitor on signing of the contract.
Stamp Duty
Stamp duty is calculated from the contract price at the rate of 0.15% of the value, up to the value of CYP100,000. Thereafter, the rate becomes 0.2‰. Payment is due within 30 days of signing the contract and registering it at the Land Registry.
Transfer Fees
Property transfer fees are to be paid in one instalment to the Land Registry office. You have the right to deliver this document personally or by a Power of Attorney to your Solicitor. These fees reflect the property's selling rate on the date of purchase. The amount is based on a graduated scale explained in the table below. You will be responsible for paying this instalment once the title deeds are transferred into your name. Transfer fees are required with the purpose of transferring freehold ownership into your name. It is your responsibility to settle the payment of this fee.
Property Value (CYP) Transfer fees rate (%)
For the first 50,000 3%
For 50,000 – 100,000 5%
Over 100,000 8%
If you are buying jointly, the tax thresholds remain the same, but as the property value is halved for each of the joint owners, the tax burden may be reduced.
Example: For a property value 70.000 CYP, purchased in a single name, the transfer fees due will be 2.500 CYP.
Up to 50.000 CYP 3% 1,500 CYP
Remaining 20.000 CYP 5% 1,000 CYP
Total 2,500 CYP
If the property is in joint names (i.e. husband and wife) or two individual names, then the purchase value is divided into two portions resulting in reduced transfer fees. For property purchased in the amount of 70.000 CYP in the names of the two persons, the transfer fees due will be 2.100 CYP.
First 35,000 3% 1,050 CYP (share of husband)
Second 35,000 3% 1,050 CYP (share of wife)
Total 2,100 CYP
The transfer of Title Deeds will take between 3 and 10 years depending on the location of the property. You will not have to pay the fee until the title deeds have been issued. However, this does not affect you ability to sell the property at any time.
Double Taxation Treaties
Cyprus has double taxation treaties with many European and other countries, safeguarding its residents from paying tax in both countries.
Immovable Property Tax
This is an annual tax payable by all Cypriot property owners, regardless of their residence status, based on their property value. Buildings under a preservation order or belonging to a charitable organization and are exempt of tax as well as property owners whose property value is below CYP100,000.
Above that value the tax rates are as follows:
Property Value (CYP) Annual Property tax rate (%)
Up to 100,000 Exempt
100,001 to 250,000 0.2%
250,001 to 500,000 0.3%
Over 500,000 0.35%
VAT Payable on Property
Since Cyprus’ accession to the EU, VAT must be paid when buying a house. There are two levels of VAT – 5% for the first house purchase by permanent residents in Cyprus and 15% for any other purchase, However, the Cyprus Government has not implemented the law or defined what the criteria will be for purchasers to qualify for first time buyer status. All prices quotes for property will be inclusive of VAT at the standard rate of 15%.
Capital Gains Tax
Capital gain is revenue attained from the sale of an asset that was previously purchased at a lower price. Generally, capital gains are attained from the sale of stocks, bonds, and property. When the sale of one of these assets suffers a loss instead of making revenue, this drop in profit exemplifies capital loss.
Upon the reselling of your property, capital gains tax will be payable at the rate of 20% on the profit revenue, with the first 10.000 CYP being waived for each person. The profits are the variations between the sales proceeds and the original cost of the property. With reference to property purchased before January 1st, 1980, the profits are the difference between the sales income and the market value of the property as of January 1st, 1980. In addition to this payment, the seller is permitted to an additional allowance concerning the transfer fees paid, annual inflation rates and the cost of any renovations made to the property. . If you are a permanent resident in the property, there is a lifetime exemption of CYP50,000 (once only).
Personal Income Tax
Individuals are liable for personal income tax if they spend more than 185 days per year in Cyprus. Tax residents of Cyprus are taxed on all income derived from Cyprus and abroad. Non-tax residents are taxed only on income derived from Cyprus. The income tax applicable is as follows:
Chargeable Income (CYP) Tax rate (%) Accumulated tax in CYP
0-10,000 0% 0
10,001-15,000 20% 1,000
15,001-20,000 25% 2,250
Over 20,000 30%
Inheritance Tax
Inheritance tax was abolished in Cyprus on 1st January 2000.
Pension Tax
If you are receiving your pension in Cyprus you will only be taxed as follows:- Up to 2,000 CYP is exempt Above 2,000 CYP is taxed at 5%
If you are receiving your pension from abroad, you can choose between being taxed as above or following the ‘personal income tax’ taxation, whichever is more advantageous for your situation.
Local Authority Tax (Council Tax)
These taxes vary according to the area, and the size and type of property. IT is usually set at between CYP30 and CYP100 per year. The tax covers rubbish disposal, street lighting and cleaning, sewerage etc.
Cost of Living Expenses
Compared to other European countries the cost of living in Cyprus is relatively low. Average expenses for 2 people can be stated as follows:
- Electricity bills: CYP60-CYP90 every two months
- Water bills: CYP40 every four months
- Gas bottles: CYP44 per bottle
- House insurance: CYP160 per year for the average 2 bedroom villa
