Cyprus is very attractive to foreign investors. But when buying Cyprus is very attractive to foreign investors. But when buying property in Limassol or other prime area there are a number of additional costs and taxes of which any buyer should be aware prior to purchase.
Stamp duty is payable by a new property owner within 30 days of signing a contract. Stamp duty is either 0.15% or 0.2% depending on the property purchase price:
- Up to €170,860 - 0,15%
- Over €170,860 - 0.2%
Value Added Tax
Buyers of new property are liable to pay Value Added Tax. VAT rate is 19% as of 13 January 2014.
However, a grant scheme has been introduced for some categories of buyers:
- VAT is not payable on the purchase of those new properties where planning permission was granted before 1 May 2004
- a reduced VAT rate of 5% may apply on the purchase and/or construction of primary and permanent residence
investor only pays VAT when he purchases property, and there is no VAT charged when he sells. If the property has been used then it will be considered to be a resale and VAT will not be due.
The transfer tax
The transfer tax is based on the purchase price or market value of the property, as determined by the Land Registry department and is levied at progressive rates.
Rates (PROPERTY VALUE/TAX RATE):
- Up to €85,430 - 3%
- €85,430 - €170,861 - 5%
- Over €170,861 - 8%
Immovable Property Tax
Immovable Property Tax (IPT) is imposed on the market value of property based on calculated values as at 1st January 1980.
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