Property transfer TAX in Cyprus (Transfer Fee)

Almost everyone is dreaming of buying a property in Cyprus. Cyprus is one of the attractive countries for Real Estate Investment. We will provide more details about TAX for purchasing a Cyprus property – TAX transfer (Title) or Transfer Fee.

The buyer becomes a registered owner when he gets a Property Certificate – Title Deed for the acquired property. The new owner should pay a transfer fee to the Cyprus Land Department. The total amount depends on the contract value of the property, excluding VAT.

NB! From 2016, buyers of new real estate (from the developer) should not pay a Transfer fee in Cyprus.

How much should be paid? 

The total amount of tax depends on the value of the acquired property. The Transfer Fee is calculated as follows: 

1. Up to €85 000 of the property value - 3%
2. From €85 001 to €170 000 of the property value - 5%
3. From €170 001 of the property value - 8%.

An example: 

The purchaser bought a house for €300 000. The total amount for title deed will be the following:

€85 000 x 3% + €85 000 x 5% + €130 000 x 8% = €17 200

Transfer fee: €17 200

NB!

For all those property sales for which VAT was paid, no transfer fees are applied. For all other cases, a 50% reduction is applied to the amount shown above.

To calculate the total amount of transfer fee for each object, you can do at the Department of Lands and Surveys of Cyprus's official website.

How to save money, buying a property in Cyprus?

Unfortunately, it is impossible to lower the cost of real estate in the contact and save in this case. Because the transfer fee will be paid only after checking the property's value by the Department of Lands, according to the analysis of the place, the object will compare with similar properties in the same area and other characteristics. Therefore, it is not possible to pay a part of not official money to the seller.

If the property is in joint names e.g., a couple – husband and wife or two individuals, then the purchase is divided into two parts, which result in a reduced Transfer Fee.

The general calculation formula will remain unchanged, but the total transfer tax will be lower, as the tax payment will be shared between several people.

The following example clearly illustrates this:

The property was purchased for €300 000, in the names of two persons. The total fees will be the following:

(€85 000 x 3% + €65 000 x 5%) x 2 = €11 600 for both

The total saving is €5 600. 

NB!

For all those property sales for which VAT was paid, no transfer fees are applied. For all other cases, a 50% reduction is applied to the amount shown above.

Then more people participate in the transaction, then less TAX.

No transfer fee will be payable for the properties in the following cases:

• In case of reorganization
• In case of restructuring
• In case of bankruptcy, liquidation, sale of the pledged item by a lender, where the income is no more than €350 000 per owner
• When transferring property that is subject to EU value-added tax as standard and reduced rates.

In case when the property is transferred free of charge, the Transfer Fee is calculated as the following:

• From parents to children – 0%
• Between spouses – 0.1%
• Between persons of the third degree of kinship – 0.1%.

If you have any questions or need professional assistance, leave a comment under this post or in the special section of our portal.