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Available : 522 properties

Taxation E-mail Print

Cyprus has the European Union's most favourable tax system for corporate & individuals

Now at 12.5% corporate tax, Cyprus has the lowest rates in the EU, together with Ireland (12.5%) and excluding the Isle of Man, Jersey and Guernsey, which although have a nil rate for non-financial services firms (and 10% for financial services firms) are not in the EU.

It is important to highlight that Cyprus is not an offshore tax haven. The Cypriot tax regime and tax legislation is in full conformity with both European Union Laws and Directives and with the Organisation for Economic Cooperation and Development (OECD). In fact, Cyprus has not only fully adopted all EU Directives, it has even gone further by not imposing minimum holding period, percentage holding and any other restrictions used by most Member States. This then also becomes one of the main tax benefits to investment activities via Cyprus; that is, the sector's global recognition, conformity and credibility. Testament to this is also the extensive network of Cyprus double taxation treaties, working closely with other nations to benefit their private sector, encourage investment, growth and progress, whilst ultimately also benefiting the company's home country.

Indeed, tax planning advantages in Cyprus reach far beyond saving tax (money). It is a complete business strategy for investment (especially to Europe, Middle East and Africa), as well as a global solution for financial efficiency. These benefits are for large corporate companies, small and medium size enterprises (SME), as well as individuals.

 

PROPERTY TAXES

Stamp Duty: The purchaser is liable for the payment of stamp duty at the rate of € 1.5 per thousand up to the value of € 170,000 and thereafter the rate is € 2 per-thousand. This duty should be paid within 30 days of signing the contract.

Transfer fees: Transfer fees  are paid to the district Land Registry Office upon transfer of the property with the following scale

the transfer fees charged by the Land Registry Department are as follows:


Purchase Price(euros)

Rate    %

Fees (euros)

The first 85.000

3

2.550

85.001-170.000

5

4.250

Over 170.001

8

 

 

All sales  contracts concluded between 2 December 2011 and 31 December 2016, which are subject to VAT will be exempt from the above transfer fees and those not subject to VAT will be eligible for a 50% exemption from the above transfer fees (subject to conditions).

 

 

Mortgage Registration Fees

Mortgage registration fees are 1% of the current market value.

 

 

Immovable Property Tax

Immovable Property Tax is imposed on the market value as at 1 January 1980 and applies to immovable property located in Cyprus owned by the taxpayer on 1 January of each year. This tax is payable on 30 September each year. Physical and legal persons are both liable to Immovable Property Tax.

As from 1 January 2013, the bands and rates for Immovable Property Tax for properties situated in Cyprus have been revised as per the table below which apply per owner, not per property. Property owners whose property has a total value of €12.500 or less (using values of 1.1.1980) are exempt from Immovable Property Tax.

Tax Rates

Property Value (as at 1.1.80)

Rate/1000

Accumulated Tax (euros)

Up to 40.000

6

240

40.001-120.000

8

880

120.001-170.000

9

1.330

170.001-300.000

11

2.760

300.001-500.000

13

5.360

500.001-800.000

15

9.860

800.001-3.000.000

17

47.260

Over  3.000.001

19

 

 

 

 

 

 

 

VAT Payable on Property

Since Cyprus’ EU accession in 2004, a standard VAT rate of 19% is required to be paid when buying a new property.

However, following a recent VAT Amendment Law, a reduced VAT rate, starting from 5%, is applicable for the acquisition of new residential properties.

For the reduced rate to be in effect, certain terms and conditions must be met:

  • The property must be used as the primary and permanent residence of the applicant (for the next ten years).
  • The applicant has not acquired any other residence in Cyprus with a reduced VAT rate.
  • The applicant must be an individual, over 18 years old, thus legal entities are excluded.


The reduced VAT rate of 5% is applied on the first 200 square meters (building coefficient) of the property as per the architectural plans submitted to the Authorities. On the remaining square meters, the standard rate of 19% is imposed.

 

Capital Gains Tax

Capital Gains Tax in Cyprus is imposed at a rate of 20% on gains from you selling (disposing of) your personal property (immovable property) located in Cyprus, including gains from shares in companies owning immovable property in Cyprus.

Capital Gains Tax in Cyprus is calculated on the total proceeds from the sale minus inflation, investment allowances, transfer fees, interest paid on loans, costs for any repairs and/or maintenance you have carried out on the property and professional and legal fees. Total exemption cannot exceed €85.430,07 and is conditional on the owner having resided in the property for at least 5 years continuously before the sale of the property. Proof of this is required through electricity, water, and telephone invoices for the address of your property in Cyprus.

 

Inheritance Tax
This was abolished as of 1st January 2000.

 

Local Authority Tax

This tax covers the cost of refuse disposal, street lighting etc. and ranges from approximately CYP 30.00 - 100.00 per annum, dependent on the size of your property.

Basic utilities such as electricity, water and telephone are payable direct to the relevant suppliers and charges are based on meter readings.