When buying a new property in Cyprus, these are the taxes and fees you will be liable for.

Stamp Duty

This is payable at the time of signing the contract, and is levied at the rate of CY£1.50 (that’s one pound 50 cents, not 1.5%) per CY£1000 of the contract price up to CY£100,000 and at CY£2 per CY£1000 thereafter.So, for a property with a purchase price of CY£150,000, the Stamp Duty payable will be:

First CY£100,000: 100 x CY£1.50 = CY£150
Balance of CY£50,000: 50 x CY£2 = CY£100
Total Stamp Duty: CY£250

Transfer Tax

This is payable to the Land Registry Office only when the Title Deed is issued, which may be a considerable time after you have taken legal ownership of the property. It is levied in 3 bands as a percentage of the purchase price as follows:

First CY£50,000: 3%
Next CY£50,000: 5%
Over CY£100,000: 8%

The tax is levied at the appropriate rate for each band, so, for example, if the total purchase price was CY£150,000, you pay the 8% only on the CY£50,000 over and above CY£100,000, not on the whole purchase price. Here is an example for a purchase price of CY£150,000:

So, if the purchase price was CY£120,000, you would still pay a total of CY£4000 on the first CY£100,000 (1500 + 2500 as above) then 8% on the remaining CY£20,000 (which is CY£1600) giving a total tax amount of CY£5600.

However, it is worth noting that the amount of transfer tax can be reduced if you buy the property in joint names. This is because the tax liability is divided equally between the signatories of the contract, so it is possible to avoid the higher tax band(s). For example, if we take the purchase price of CY£150,000, but divide it between the joint buyers named on the contract, each is liable for CY£75,000. So, each will pay tax on only CY£75,000 and thus the 8% tax band will be avoided. Here are the figures:

Buyer A will pay 3% on CY£50,000 (1500) and 5% on CY£25,000 (1250) making a total tax amount of CY£2750.

Buyer B will pay the same on their CY£75,000, i.e. CY£2750.

So, the total tax bill is CY£2750 x 2 = CY£5,500 as opposed to CY£8000 if the property was bought in one name, thus saving CY£2500.

By the same reckoning, if two of you buy a property for less than CY£100,000 (let’s say an apartment for CY£80,000) then you will each pay tax at 3% on your CY£40,000, thus avoiding the 5% tax band.

If this is confusing, please contact us and we’ll answer any of your queries.

VAT (Value Added Tax)

VAT of 15% was introduced in Cyprus for all new build properties where the application for a building permit was made on or after 1st May 2004. This means that virtually all new properties will now have VAT included in the price. However, there are two points you need to look out for:

1. Some developers advertise prices that do not include VAT, and only mention VAT in the small print or not at all, until a buyer has shown an interest. We consider this to be ‘sharp practice’, because all buyers will have to pay the VAT, so why conceal it as if it’s some sort of ‘optional extra’? So, you can rest assured that all prices shown on this website include VAT where applicable.
2. We say ‘where applicable’ above, because there are a few cases where VAT legitimately does not apply. This is where a developer actually applied for a permit before May 2004. (Some of the larger developers have stocks of land that they bought years ago, and for which they obtained building permission prior to the introduction of VAT). Another example would be a small builder who obtained permission for a villa prior to May 2004, but for some reason did not proceed immediately. VAT would not therefore apply to the purchase price if he now went ahead and built the villa, and you would still be able to modify the plans without it attracting VAT.

Annual Property Tax

There is no Council Tax as such in Cyprus. There are, however, local municipal ‘rates’ for such things as street lighting, refuse collection, etc. These are considerably lower than Council Tax in the UK, and only apply to properties with a value of over CY£100,000 as valued at 1st January 1980!

The tax rates are as follows:

So, for a property valued at CY£140,000 at the prices prevailing in 1980, the first CY£100,000 would be exempt, and tax would be applied at 0.25% on the balance of £40,000. This would make your annual rates CY£100 – just over CY£8 per month.

Communal Charges (Apartments and Townhouses)

Virtually all developments of apartments and townhouses will have communal facilities, which will include some or all of the following: swimming pool, changing rooms and toilets, gardens, staircases, paths, lighting, a lift (if more than 2 storeys) and so on. All of these have to be maintained and paid for, and this money is collected by way of a communal charge which all owners pay annually or monthly. The charge is usually based on how many bedrooms you have, or on the floor area of your property. The larger developers will have their own maintenance staff, and the smaller ones will contract it out to specialist companies. You will be contractually obliged to pay this charge. As a guide, you should budget about CY£35 per month for this.

Legal Fees

We cannot quote legal fees, of course, but you are free to contact any lawyer in Cyprus. Most will give you a pretty accurate, or even a fixed price for the legal and conveyancing work. In general terms, the rates are very much the same as in the UK.

Before the lawyer quotes you a price, you will need to tell him/her the approximate value and type of property, the location, and any other information he/she asks for.

If you wish to avoid some of the pitfalls you may encounter if you choose not to use a lawyer, please read our Contracts section.

You are also free to contact our own lawyers who we have used for many years for personal and business matters. They will be happy to give you general advice by email before you travel to Cyprus, and if you indicate the type of property you are looking for, e.g. a 2-bedroom apartment in Paphos, they will give you an accurate estimate of their fees. This is completely free, and there is no obligation to use their services. We do not make any referral commission for this – it’s all part of our service, which is aimed at building a long-term relationship with our clients. If you would like to get in touch with our lawyers, please contact us.

Please note that if you are ‘shopping around’ for lawyers, make sure you ask them for an all-inclusive quote to include the application for the title deeds, which may be a year or more after you have taken up residence. Some lawyers don’t include this in their conveyancing fee, so you get an unexpected bill when the title deeds are applied for.

Important Note
The information on this website is based on our interpretation of the current regulations in Cyprus. Whilst we make every endeavour to provide accurate information, we cannot accept liability for any loss incurred due to inaccuracies or omissions on this website. Prospective buyers are strongly recommended to take independent legal advice before entering into any agreements or parting with any money.