Cyprus property taxes

There is a reduced rate of 5% to the first 130 sq m of a primary residence, provided three criteria are met. These criteria are:

• the primary residence is up to EUR 350,000 in value;
• the total transaction does not exceed EUR 475,000 in value;
• The total internal areas constructed in the residence are at most 190 sq m

Stamp duty is a tax levied by a government for transactions within its territory.

For real estate transactions in Cyprus, stamp duty is payable before or at the time of signing the contract (or within 30 days later) and calculated according to the value of the transaction:

• contracts with a value of up to € 5,000 do not pay stamp duty;
• contracts between € 5,001 and 170,000 pay € 1,50 for every 1,000 or part of 1,000;
• contracts over € 170,000 pay € 2 for every 1,000 or part of 1,000;
• the maximum stamp duty payable is € 20,000.

Transfer fees are conveyance fees paid when ownership is transferred. They are paid by the buyer and are paid to the Department of Lands and Surveys of the Ministry of the Interior upon property transfer. The amount is calculated according to the value of the property.

The rates are as follows (prices in euros):

• For the first 85,000, it is 3%.
• From 85,001 to 170,000, it is 5%.
• Over 170,000, it is 8%.

Capital gains tax is tax paid by the property seller on profit from the sale. It is the profit that is taxed, not the whole amount. To calculate the taxable amount, you deduce the property's value on 1 January 1980 (or, if the acquisition of the property happened later, the price paid for it adjusted for inflation) from the sale price. Additions and expenditures on the property may also be deducted. The rate of CGT charged is 20%.

Property on which CGT is paid is:

• immovable property in the Republic,
• shares in companies that own immovable property in the Republic,
• shares in companies that participate in a company or companies that own immovable property in the Republic (upon conditions)
• agreements to sell property in the Republic.

According to the Department of Lands and Surveys, the buyer should ask for at least three documents:

• Copy of the title deeds: 10 euros.
• Search certificate: covering all the districts costs 20 euros. The search certificate will show any mortgages, burdens, memos, or other encumbrances on the property.
• Copy of the certificate of final approval from the Department of Town Planning and Housing.

To sell property in Cyprus, the seller must get a tax clearance certificate by showing that they have paid the following taxes and sums due:

• Capital Gains Tax
• Transfer levy for the Central Agency for Equal Distribution of Burdens
• Municipal tax
• Sewerage fee
• Garbage Collection fee
• Water board fee
• Electricity Authority bill

For apartments:

• A statement from the management committee that the seller has paid the communal fees.

You will agree on the relevant fee beforehand with your:

• Lawyer
• Property evaluator
• Real estate agent (the buyer does not pay the real estate agent; the seller does).

Proceeds from renting out property are taxed as income in Cyprus. Rental income is added to the landlord's other income. Then, the tax is charged according to the whole amount. The percentage is 0-35%, depending on the amount.

The landlord will pay VAT on the rental income when:

1. The rental income is more than EUR 15,600 per year; and,
2. The renting started after 17 November 2017; and,
3. The landlord is leasing the property to carry on taxable activities. These are the activities of selling goods and or providing services. For example, the tenant uses the property for retail.

Property owners need to pay the following taxes:

• Municipal tax
• Sewerage fee
• Garbage Collection fee

A property management company oversees, manages, and maintains a property on behalf of the owner. Such services are useful because they include handling tenant problems and complaints and ensuring compliance with legal and safety regulations.

Property maintenance fees depend on the type and size of the property and the services included. If you rent out the property, a typical arrangement is for the maintenance fee to be 10% of the rental value.

To run commercial premises in Cyprus, you need a license from the relevant municipality.

You will need to renew the license every six months or yearly. Applying for and renewing such a license involves fees, which are treated as taxation on the business properties.

To issue the license, you must apply to the relevant municipality showing:

• Building permission for the premises to be used for the intended purpose.
• Local council permission.
• Copy of the title deeds.

Depending on the case, you may also need the following:

• Concerning cafes, restaurants and hotels, a license from the Deputy Ministry of Tourism.
• Safety certificate from the Fire Department.
• Health and sanitation certificate from the local or communal council.
• Safety certificate from the Department of Electrical and Mechanical Services (Ministry of Transport, Communications and Works).