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  Assosiated Cost And Taxes

 

 

Real Estate Transfer fees are imposed by the Lands Registry in order to transfer FREEHOLD
ownership to the name of the purchaser. The transfer fees are due for payment when the
transfer of the title deed in the name of thepurchaser takes place. The Purchaser is solely
responsible for the payment of the transfer fees. The rates are on agraduated scale.

Value of property (€) Transfer fee rate (%)
up to 85.430,07 3
from 85.430,08 to 170.860,14 5
from 170.860,15 and over 8

If the property is in joint names e.g. of a couple (husband and wife) or two individuals, then
 the purchase value is divided into two parts which results in reduced transfer fees.

The following example clearly illustrates this

For property purchased for € 200.000 in one name, the fees payable are € 9.165,59.

For Property in one name
Up to € 85.430,07 @ 3% = € 2.562,90
from € 85.430,08 to € 170.860,14 @ 5% = € 4.271,50
The remaining € 29.139,86 @ 8% = € 2.331,19
Total fees payable = € 9.165,59

For property purchased for € 200.000 in the names of two persons, the fees payable are
€ 6.582,80.

For property in the names of two persons
First € 85.430,07 @ 3% = € 2.562,90 (Share of husband)
Second € 85.430,07 @ 3% = € 2.562,90 (share of wife)
The remaining of First, € 14.569,93 @ 5% = € 728,50 (Share of husband)
The remaining of Second, € 14.569,93 @ 5% = € 728,50 (Share of husband)
Total fees payable = € 6.582,80

 

Immovable Property Tax

The annual immovable property tax is imposed on the market value of the property as at
 1st January 1980 and applies to the immovable property owned by the taxpayer on
1st January each year.

Market value of property (1/1/1980)(€) Annual Property tax (‰)
up to 170.860,14 0
170.860,15 to 427.150,36 2.5
427.150,37 to 854.300,72 3.5
over 854.300,73 4.0

Capital Gains Tax

On gains from disposal of immovable property situated in Cyprus, capital gains tax will be
imposed at the rate of 20% withthe first € 17.086,14 being exempt for each person. The gain
 is the difference between the sales proceeds and the original cost of the property. In the case
of a property which was purchased before 1/1/1980, the gains are the difference between
 the sales proceeds and the market value of the property as of 1/1/1980.
The seller is entitled to a further allowance regarding the transfer fees paid, inflation rate per
year and the cost of any additions made to the house.
Gains from the disposal of a private residence are exempt up to € 85.430,07 in total if the owner
resides in it continuously for at least five years prior to disposal.
Gains from the disposal of a dwelling house are exempt up to € 85.430,07 in total if the owner
resides in it continuously for at least five years prior to disposal.

Stamp Duty on Contracts

The purchaser is liable for the payment of stamp duty on the purchase price of the property at the
 rate of € 2.56 per thousand up to€ 170.860,14 and thereafter at the rate of € 3.42 per thousand.
This should be paid within 30 days from signing of the contract of sale.
For example if the purchase price is € 256,290.22

first € 170.860,14 2.56‰ € 437.40
next € 85.430,08 3.42‰ € 292.17
  Total € 729.57

Estate Duty

Estate Duty tax has been abolished as from the first of January 2000
(Statute No.78(1)/2000).

Local Authority Taxes & Rates

A rough guide could be approximately € 85 - € 260 per year depending on the size of your property.
This tax is for refuse collection, street lighting, sewerage, etc.
The basic utilities, electricity, water and telephone are payable individually in accordance with the
consumption and based on a meter reading.


VAT

Since 1/5/04 a new statute in respect of VAT on properties has been introduced. Disposals of
newly-constructed properties for which a proper application for planning permit has been
submitted with the relevant authorities after 1/5/04 are subject to VAT at standard rate.
Under certain conditions, a grant is given to entitled persons for the purchase of
newly-constructed properties that are used as the main permanent residence.

The application for the grant is submitted to the Ministry of Finance by any physical person
citizen of the Republic of Cyprus or of any other EU member state who resides permanently
in the Republic of Cyprus. The grant is for properties whose total covered area does not exceed
250 m2 and is restricted to 130 m2. For more details you may contact a local accountant.

Tax Advantages

Cyprus is unique when it comes to the taxation aspects of living on the island.
The following income tax rates apply to individuals:

Chargeable income
(€)
Tax Rate
(%)
Accumulated tax
(€)
0 – 19.500 - 0
19.501 – 28.000 20 1.700
28.001 – 36.300 25 3.775
over 36.301 30  

Retirees who become residents in Cyprus are taxed on their pensions from abroad at the rate of
5% per annum while an annual exception for the first €3.417,20 is granted.
Additionally, Cyprus
has established Double Taxation treaties with the majority of European and non-European
countries, safe-guarding that its residents will avoid paying tax in both countries.
This givesthe option to the citizens of these countries to take advantage of the very low rates in
Cyprus.

 

 

 

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