Legal & Finance

(A) Taxes and Duties

1. Stamp duty

When acquiring a property in Cyprus, the purchaser usually pays the stamp duty on the sale and purchase agreement, as well as related documents.

It is important to factor in these costs when planning your property acquisition in Cyprus.

Stamp duty is calculated as follows:

• Exemption: The first €5,000 of the purchase price is exempt from stamp duty.
• Rate for €5,001 – €170,000: For the portion of the purchase price between €5,001 and €170,000, the applicable stamp duty is 0.15%.
• Rate for Amounts Over €170,000: For any amounts exceeding €170,000, the stamp duty is calculated at 0.2%. Additionally, there is a fee of €2 for each extra certified true copy of the contract.

The maximum stamp duty payable is capped at €20,000 per agreement.

2. Transfer fees

The transfer of property ownership in Cyprus is completed when the title deed is issued in the name of the buyer by the Land Registry. On the day of title registration, the Land Registry will assess the market value of the property being purchased and apply Transfer Fees based on the latest guidelines.

For property sales, excluding transactions between parents and children, as well as donations between relatives beyond the third degree or non-relatives, the applicable Transfer Fees are as follows:

• For the first €85,000: 3%
• For the next €85,000 (from €85,001 to €170,000): 5%
• For any amount exceeding €170,000: 8%

In certain cases, Transfer Fees may be waived entirely, particularly if VAT has already been paid on the property.

The Land Registry will provide clarification on the specific Transfer Fees applicable for each individual transaction, ensuring that buyers are fully informed based on their unique circumstances.

3. Value Added Tax (V.A.T)

Value Added Tax (VAT) at the rate of 19% currently applies to the purchase price of new properties only. However, there is a VAT structure in place which ensures that potential homeowners can benefit from reduced costs when establishing their primary residence in Cyprus.

Specifically, VAT may be reduced to 5% of the property is intended for use as the primary and permanent residence of the applicant, subject to the following conditions:

• Submission of an application with the relevant supporting documents.
• The property must be used as the main primary and permanent place of residence.
• The applicant does not own any other property which is used as the primary residence in Cyprus.

The reduced rate of 5% is applied only on the first 130 square meters of the property. For the properties exceeding 130 square meters, the standard VAT rate of 19% will apply to the portion of the property beyond this threshold, specifically for the area from 130 square meters up to 190 square meters.

4. Capital Gains Tax (CGT)

The Capital Gains Tax in Cyprus is applied to the profit made from the sale of a property at a rate of 20%. Sellers benefit from a one-time lifetime allowance, which exempts the first €17,086 of profit from tax. This exemption is available to each seller until the allowance has been fully utilized.

This means that if your profit from the sale of the property is below this threshold, you will not incur any Capital Gains Tax. It’s important to keep this allowance in mind when planning your property sale, as it can significantly reduce your tax liability.

5. Immovable Property Tax

The Immovable Property Tax in Cyprus was previously payable by property owners until the end of 2016. Since 2017, this tax has been abolished for all new property owners. However, individuals who owned property in Cyprus before 2017 are still required to fulfil their tax obligations related to this tax.

As a result, current property owners can benefit from the removal of this tax, while those who owned property prior to the change must ensure compliance with any remaining obligations.

6. Local Authorities: Taxes & Rates

Cyprus property taxes and rates vary according to which Municipality/Council the property is located and are calculated based to the respective property size. These local taxes are contributing to the maintenance and improvement of community services and infrastructure. They relate and encompass various local services such as sewage services, refuse collection, street lighting and other local expenses.

(Β) Permanent Residency Programs for Investors

In terms of Permanent Residency programs, Cyprus offers highly attractive options to third country citizens, seeking a secure and comfortable lifestyle within the European Union. The following scheme provides an advantageous choice for those looking to reside in Cyprus or invest in the capital of a Cypriot company.

The Migration Department of Cyprus currently facilitates the expedited granting of Immigration Permits to third-country nationals who wish to invest in the country through the following categories:

• Investment in a house/apartment: You can obtain residency by investing at least €300,000 (plus VAT) in a brand-new house or apartment in Cyprus. It is important to note that upon application submission, you must provide evidence that the investment funds originated from abroad.
• Investment in real estate (excluding houses/apartments): This option allows for the purchase of other types of real estate, such as offices, shops, hotels, or related developments, with a total investment of €300,000. Resales are also eligible. For this investment, the applicant's annual income may be derived from activities conducted within Cyprus.
• Investment in Cyprus Company’s share capital: To qualify, an initial investment of €300,000 in the share capital of a newly registered company in Cyprus or an increase of €300,000 in the share capital of an existing company is required. The company must be based and operating in Cyprus, have a proven physical presence, and employ at least five individuals.

(C) Financing the Property

If you require financial assistance to purchase your property, banks and electronic money institutions in Cyprus are readily available to support both local and foreign applicants. These institutions typically offer guidance throughout the application process, ensuring you understand the necessary documentation and requirements.

A range of financing options and personalized services are offered to help you achieve your property ownership goals with ease.

(D) Process of Acquiring a Property

In recent years, Cyprus has emerged as a prominent financial and business hub, attracting numerous companies and international buyers. To facilitate this growth, local authorities have streamlined the property acquisition process, making it more straightforward for foreign buyers. This ensures a smooth and efficient experience for anyone looking to invest in Cypriot real estate.

(E) Transfer of Ownership of our Properties

At TOR Properties, we expertly manage the entire transfer of ownership process from start to finish, ensuring professionalism and efficiency every step of the way. We adhere to all requirements set by the Land Registry, guaranteeing that buyers receive their title deeds in their names. Our commitment to transparency and excellence allows us to deliver high-end properties with confidence.

TOR Properties boasts a team of experienced professionals ready to guide you according to your investment goals and preferences. Trust us to facilitate a smooth and successful property ownership experience.