Immovable Property Tax

The annual immovable property tax, calculated on the market value of the property at 1st of January 1980:

 

Market value of property (CYP)

Annual Property tax (%)

 up to 100,000 

 exempt

 100,001 to 250,000  

 2.5

 250,001 to 500,000

 3.5

 over 500,000

 4.0

 

Capital Gains Tax

On disposal of the property, capital gains tax will be payable at the rate of 20% on the gain with the first CYP £10.000 being exempt for each person. The gains are the difference between the sales proceeds and the original cost of the property. In the case of a property which was purchased before 1/1/1980, the gains are the difference between the sales proceeds and the market value of the property as of 1/1/1980.

 

On top of this allowance, the seller is entitled to a further allowance regarding the transfer fees paid, inflation rate per year and the cost of any additions made to the house.

Gains from the disposal of a dwelling house are exempt up to CYP £50.000 in total if the owner resides in it continuously for at least five years prior to disposal.

Stamp Duty

The purchaser is liable for the payment of stamp duty at the rate of 1.50 CY Pounds per thousand up to the value of £100.000 CY Pounds and thereafter at the rate of 2 CY Pounds per thousand.

  

For example if the purchase price is CYP £150. 000

 first CYP £100 000 1.5‰

 CYP £150

 next CYP £50 000 2.0‰ 

 CYP £100

 Total 

 CYP £250

 

Estate Duty Estate Duty tax has been abolished as from the first of January 2000

(Statute No.78 (1)/2000).

 

Local Authority Taxes & Rates

A rough guide could be approximately CYP £50 -£150 per year depending on the size of your property.

This tax is for refuse collection, street lighting, sewerage, etc.

The basic utilities, electricity, water and telephone are payable individually in accordance with the consumption and based on a meter reading.

 

VAT

Since 1/5/04 a statute in respect of VAT on properties was introduced. In addition to other amendments, this statute introduced VAT on the rate of 15%.

 

Tax Advantages

Cyprus is unique when it comes to the taxation aspects of living on the island.

For individuals, CYP £2.000 of pension income from abroad is received tax free p.a., and thereafter income tax is applied at the very low rate of 5% to amounts above this.

Of course as for all Cypriot tax residents their total annual income up to £9.000 (£10.000 from 2004) can be tax exempt provided that thereafter they will be taxed according to the scale Cypriots are taxed.

Note that one cannot benefit on both.

Additionally, Cyprus has Double Taxation treaties with many European and other countries, safe-guarding its residents from paying tax in both countries. This gives the option to the citizens of those countries to take advantage of the very low rate in Cyprus.

Transfer of ownership from Vendor to Purchaser is undertaken by a simple procedure through the Cyprus Land Registry Office, either by the buyer in person or by appointing a third party with a Power of Attorney.

The transfer of ownership requires a permit from the Council of Ministers.