Buying a property in Cyprus has numerous financial advantages. Property costs in Cyprus are extremely low — a studio apartment in Paphos may be had for as little as €30,000! There are also wonderful tax incentives available for property owners, including no inheritance tax in Cyprus and a 5% tax on a foreign pension in Cyprus for individuals who are retired.
Plus, there’s the Republic of Cyprus’ “golden visa” program, which provides non-European citizens an EU passport or Permanent Residency Permits in exchange for investing in a property in Cyprus* — something that anti-Brexiteers may find appealing!
With a cost of living roughly 19% lower than the UK, it’s no surprise that Cyprus is a popular choice for clever buyers looking to invest in property overseas, according to worldwide consumer comparison price website Numbeo. However, what are the costs of buying a property in Cyprus?
Fees for legal services in Cyprus
When purchasing a property in Cyprus, it is highly recommended that you hire an independent lawyer. Your lawyer in Cyprus should proceed with the property purchase while looking out for your best interests and safeguarding your assets. It is not uncommon for title deed concerns to arise in Cyprus, and your lawyer will be responsible for ensuring that any possible issues are appropriately addressed and that your property purchase in Cyprus is safe and legal.
In Cyprus, legal expenses are normally calculated as a percentage of the purchase price of the property – often 1-2 cent + IVA (VAT). Their services should include conducting searches with the Lands Office, checking planning and building permits, determining whether the land is suitable for building (if applicable), drafting contracts, stamping and registering contracts, and applying to the Council of Ministers for permission to purchase.
If you need your lawyer to act as your Power of Attorney, there will be an extra cost for preparing the Power of Attorney, arranging for it to be certified, having it stamped at the tax office, and then going to the land registration to file it.
Fees charged by surveyors in Cyprus
The Cyprus Scientific and Technical Chamber (ETEK), which can give a guide to charges as well as a list of surveyors registered with them, shall be registered. The typical fee is around €500, but it varies depending on the property’s worth and the intricacy of the report requested.
Cyprus has a stamp duty
In Cyprus, stamp duty must be paid within 30 days after contract signing. For properties up to the value of €170,000, stamp duty is 0.15 percent of the purchase price, and for properties exceeding €170,000, it is 0.2 percent. Stamp duty is waived for the first €5,000.
On property in Cyprus, there is an IVA (Value Added Tax) that must be paid
IVA (or value added tax, VAT) is charged on all new properties at a cent of 19%. The sole exemption is if the planning permission application was filed to the planning department prior to May 1, 2004. Before making an offer, verify with the developer to see if this is included in the asking price. On the good side, IVA is only 5% for first-time buyers. You do not have to pay IVA on “second hand” properties.
Cyprus property transfer fees
When your lawyer transfers and registers the title deeds to a property in your name at the Lands Office in Cyprus, you must pay a property transfer fee in Cyprus. The fee is calculated on a sliding basis depending from 3 to 8% of the property’s value. For example, you pay 3% of the purchase price for the first €85,000 of a property’s value; 5% of the purchase price between €85,001 and €170,000; and 8% of the purchase price over €170,000.
In Cyprus, the cost of transfer fees varies depending on whether a property is purchased in one person’s name or jointly.
The purchaser pays the entire charge for properties purchased in a single name. When a property is purchased in joint names (for example, by a husband and wife), the purchase price is split between them and each is assessed separately. So, for a €170,000 property, a lone owner would pay €6,800 in transfer fees, while joint owners would pay €2,550 each, totaling €5,100 — a €1,700 savings!
The valuation of the property as evaluated by the land register on the day of the transfer determines the transfer fees payable to the government. The sales price will serve as a guide, but the final value will be determined by comparable sales. As a result, it’s possible that the land registry will place a larger value on the property you’re buying than the actual purchase price.
The transfer fees are waived for properties that are subject to IVA (VAT).
For more information on buying property in Cyprus, please offer us at +357 2563 3949 or firstname.lastname@example.org. Our friendly team would be pleased to provide FREE first advice on buying property in Cyprus!
We can also connect you with independent English-speaking lawyers in Cyprus, as well as currency exchange specialists (find out how they may save you thousands!) and international mortgage specialists.
* To participate in this program, a person must invest €2 million in real property in Cyprus for three years. Within six months, citizenship is given.