Buying real estate in Cyprus requires an understanding of tax obligations. Cyprus property taxes include VAT, stamp duty, rental tax, and municipal fees. Here’s a breakdown of the costs property owners should expect.
Taxes on Property Purchase
1. Value Added Tax (VAT)
The standard VAT rate in Cyprus is 19%. However, if the property is purchased as a primary residence, a reduced 5% VAT applies to the first 200 m². To qualify, buyers must meet specific criteria and submit an application to the tax authorities.
More information on VAT rates is available on the official Cyprus Tax Department website.
2. Stamp Duty
This tax is paid when signing the sale agreement and is calculated as follows:
• Up to €5,000 – 0% (exempt)
• €5,001 – €170,000 – 0.15%
• Above €170,000 – 0.20%
The maximum stamp duty does not exceed €20,000.
3. Transfer Fee
This fee is paid when registering the property in the buyer’s name and is calculated using a progressive scale:
• Up to €85,000 – 3%
• €85,001 – €170,000 – 5%
• Above €170,000 – 8%
If the property is subject to VAT, the transfer fee is reduced by 50%.
Taxes on Property Ownership
1. Annual Property Tax
As of 2017, Cyprus has abolished annual state property tax. However, owners must pay municipal taxes and fees.
2. Municipal Taxes and Fees
Depending on the property’s location, owners pay fees for waste collection, street lighting, and other municipal services. These costs typically range from €85 to €300 per year.
Detailed information on municipal taxes is available on the Ministry of Finance Cyprus website.
Taxes on Rental Income
If the property is rented out, the landlord is subject to income tax based on the following progressive scale:
• Up to €19,500 – 0%
• €19,501 – €28,000 – 20%
• €28,001 – €36,300 – 25%
• Above €36,300 – 30%
Additionally, a special contribution of 3% is charged on 75% of the gross rental income.
📌 Suggested Image: A breakdown of rental income tax rates in an easy-to-read table.
Current rental tax rates can be checked on the Cyprus Tax Department website.
Additional Costs When Buying Property
In addition to taxes, buyers should consider extra expenses, such as:
• Legal fees – approximately 1% of the property price.
• Mortgage arrangement fees (if applicable).
Conclusion
Understanding how Cyprus property taxes are calculated helps avoid unexpected costs and allows investors to plan their budgets efficiently.
📌 Want a detailed tax breakdown or assistance with your property purchase? Contact us via WhatsApp: +971 50 461 9022 – our experts will guide you through every step of the process.
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