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Real Estate Taxation



Transfer Fee

Transfer of the ownership right from the developer to the buyer is accompanied by property registration tax paid by the buyer to the state, a so-called Transfer Fee. Transfer Fee is calculated based on the contract value of the real estate using the following scheme:
Transfer Fee calculation
Real Estate Price Commission Fee
under EUR 85.430 3%
from EUR 85.431 to EUR 170.860 5%
over EUR 170.861 8%

Transfer fee is calculated in in the same way as in transactions on the secondary property market, i.e. every time the real estate title is transfered from one owner to another.

Tax is paid only once.

For instance, you purchased a suite from a developer for 500 000 Euro. Transfer Fee, which you will pay as a lump sum to the State for registration of ownership right under your name after you receive the Council of Ministers permission, will be the sum of the following three factors:
85,430 х 3%+85,430 х 5%+329,140 х 8% = 33,165.6 Euro
Is it possible to reduce this amount? Yes, for instance, when husband and wife share ownership or simply when there are several owners. In this case each one of them will be paying 250,000 Euro according to the contract and therefore the calculation will be as follows.
(85,430 х 3%+85,430 х 5%+79,140 х 8%) х 2= 26,331.2  Euro

Stamp duty

Stamp duty is an analog of the Russian state tax when purchasing real estate. Stamp duty is paid only once within thirty days from the date of co-signing of the property acquisition contract in Cyprus in order to register the transaction in the Inland Revenue Department.  Stamp duty for property purchase in Cyprus constitutes 0.15% when the overall cost is not exceeding EUR 170 860 and 0,2% when the amount exceeds EUR 170 860.
If the real estate you purchased is worth EUR 500,000, the stamp duty will be:
€ 170 860 x 0,15% + € 329 140 x 0,2% = € 915
To summarize the above, while buying property in Cyprus you pay two taxes – Transfer Fee (tax on transfer of ownership right) and Stamp Duty. Therefore, referring to our earlier example, when two individuals share the ownership right and they acquire an apartment worth € 500,000 they will pay a lump sum of around € 27000. There are no other payments to be made when buying property in Cyprus.
Lump-sum payments related to the transfer or sale of immobile property.

There is no inheritance tax on property in Cyprus.

If you decided to sell your property in Cyprus you are entitled to pay Capital Gains Tax, i.e. 20% of the profit.
If the seller was using the real estate he or she decided to sell, for over five years and it was the first time he or she sold property in Cyprus, the first € 85,430 are exempt from the Capital Gains Tax.

Also, confirmed expenses linked to facility operation, such as repairs, and other material costs, etc. are excluded from taxation.
When the acquisition of property is properly organized, you can already take care of further optimization and minimization of the Capital Gains

Tax given you might consider selling your property in the future.

Annual payments related to owning and operating immobile property
Municipal taxes account for a negligible amount, approximately € 50 - € 250 per year depending on the size of your property. They are paid for landscaping, garbage removal, street lighting.

Real estate tax is paid in Cyprus by the registered owner, based on the following calculations. The calculations are based on the contract value of the real estate.

Calculation of property tax
Real Estate Price Annual Tax
under EUR 170.860 not subject to taxation
from EUR 170.861 to EUR 427.150 0.25%
from EUR 427.151 to EUR 854.300 0.35%
over EUR 854.301 0.4%

Let’s say, the acquired apartment is worth EUR 500 000.

The first € 170,860 exempt from taxation. For the following € 256,289 (427,150-170,861) charged with 0.25%, which amounts to € 640.72. The remaining € 72,851 will be charged 0.35%, which is € 254.98. The final sum is  € 925.7. This is the amount you will pay each year as a property tax for property worth EUR 500,000.
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