There are huge financial benefits to buying a property in Cyprus. Property prices in Cyprus are incredibly low – you can bag yourself a studio apartment in Paphos for as little as €30,000! There are also fantastic tax benefits available for property owners with no inheritance tax in Cyprus and for those who are retired, you can expect to pay just five per cent tax on a foreign pension in Cyprus.
Plus, there’s the Republic of Cyprus’ “golden visa” scheme which grants Non-European citizens an EU passport or Permanent Residency Permits when investing in a property in Cyprus* – which may appeal to anti-Brexiteers!
With the cost of living being nearly 19 per cent cheaper in comparison to the UK, according to global consumer comparison price website Numbeo it’s no wonder that Cyprus is a popular choice for savvy buyer’s when it comes to investing in property overseas. But, what are the costs involved with buying a property in Cyprus?
Legal fees in Cyprus
It is highly advisable that you use an independent lawyer in Cyprus when buying a property in Cyprus. Your lawyer in Cyprus should progress the property purchase whilst ensuring that your best interests are looked after and your assets are protected. It is not uncommon for there to be issues with title deeds in Cyprus and your lawyer will need to ensure that any potential problems are dealt with properly and that your property purchase in Cyprus is safe and legitimate.
Legal fees in Cyprus are usually charged as a percentage of the property purchase price – typically 1-2 per cent plus IVA (VAT). Their services should cover the search with the Lands Office, checking of planning and building permits, checks that the land is suitable for building (if relevant), drawing up of contracts, stamping and registering the contracts, and applying for permission to purchase from the Council of Ministers.
If you require your lawyer to act as Power of Attorney there will also be a small additional fee for drafting the Power of Attorney, arranging to have it certified, getting it stamped in the tax office and then visiting the land registry to lodge it.
Surveyor’s fees in Cyprus
Your chosen surveyor should be registered with The Cyprus Scientific and Technical Chamber (ETEK), which can provide a guide to charges as well as a list of surveyors registered with them. On average charges are approximately €500, but this varies depending on the value of the property and the complexity of the report required.
Stamp duty in Cyprus
In Cyprus the purchaser must pay stamp duty within 30 days of signing a contract. The rate of stamp duty payable is 0.15 per cent of the property price purchase for properties up to the value of €170,000 and 0.2 per cent for properties over €170,000. The first €5,000 is exempt from stamp duty.
IVA (VAT) payable on property in Cyprus
All new properties are subject to IVA (or value added tax, VAT) at 19 per cent. The only exception to this is those where the application for planning permission was submitted to the planning department before 1st May 2004. Sometimes this can be included in the asking price, so check with the developer before making an offer. On the plus side, first-time buyers pay IVA at only 5 per cent. For “second hand” properties you do not need to pay IVA.
Property Transfer fees in Cyprus
A property transfer fee in Cyprus is payable when the transfer of the title deeds to a property in Cyprus takes place by your lawyer transferring and registering the property in your name at the Lands Office in Cyprus. The fee is based on a sliding scale from 3 to 8 percent depending on the value of the property. For instance, for the first €85,000 of a property’s value, you pay 3 per cent of the purchase price; between €85,001 and €170,000, the rate is 5 per cent; and over €170,000 the rate is 8 per cent.
The cost of transfer fees in Cyprus can also vary depending on whether a property is purchased in one name or joint names.
For properties purchased in a single name, the purchaser pays the whole fee. However, if a property is purchased in joint names (i.e. husband and wife), the purchase value is divided between the two and each is assessed separately. So, for a property valued at €170,000 a sole owner would pay €6,800 in transfer fees but joint owners would pay €2,550 each, €5,100 in total – a saving of €1,700!
Transfer fees payable to the government is based on the value of the property as estimated by the land registry on the day of the transfer. The sales price will be an indicator but the actual value will be based on comparative sales. So, it is possible that the land registry may value the property you are buying a little higher than the actual purchase price.
Properties subject to IVA (VAT) are exempt from the transfer fees.
For more information about buying property in Cyprus check out our guide to Buying Property in Cyprus. You can also call us on 01244 470339 and email us on firstname.lastname@example.org – our friendly team will be happy to offer FREE initial advice about buying property in Cyprus!
We can also put you in touch with a recommended independent English-speaking lawyers in Cyprus, as well as currency exchange specialists (find out how they can save you thousands!) and international mortgage specialists.