Understanding Property Taxes in Cyprus

Understanding Property Taxes in Cyprus

Introduction

Understanding property taxes in Cyprus is essential for property owners and investors. This guide provides an overview of the key property taxes and how they impact property ownership in Cyprus.

Immovable Property Tax (IPT)

As of 2017, Immovable Property Tax (IPT) has been abolished in Cyprus. Previously, IPT was based on the value of the property, but property owners no longer need to pay this tax.

Transfer Fees

When purchasing property in Cyprus, buyers must pay transfer fees to the Department of Lands and Surveys. The fees are based on the property's market value and are payable upon transfer of ownership.

Stamp Duty

Stamp duty is payable on the signing of the sales contract. The amount is calculated based on the property's purchase price, with a progressive rate applied to different value bands.

Capital Gains Tax

Capital Gains Tax (CGT) is levied on the profit from the sale of immovable property in Cyprus. The current rate is 20%, but certain exemptions and deductions may apply, such as allowances for inflation and improvements made to the property.

Municipal and Local Taxes

Property owners in Cyprus are required to pay annual municipal and local taxes. These taxes vary depending on the property's location and the services provided by the local municipality.

VAT on New Properties

Value Added Tax (VAT) is applicable to the sale of new properties in Cyprus. The standard VAT rate is 19%, but a reduced rate of 5% may apply to the first 200 square meters of a primary residence.

Inheritance Tax

There is no inheritance tax in Cyprus, making it an attractive destination for property investors looking to pass on their assets to future generations.

Conclusion

Understanding property taxes in Cyprus is crucial for property owners and investors. By familiarizing yourself with the key taxes, such as transfer fees, stamp duty, capital gains tax, municipal and local taxes, and VAT on new properties, you can ensure compliance and make informed financial decisions.

Our Services

At TEFL, we offer a comprehensive range of services to help you navigate property taxes in Cyprus. Our professional team provides:

• Tax Guidance: Expert advice on all property taxes and how they impact property ownership.
• Compliance Assistance: Help with ensuring compliance with all tax requirements and deadlines.
• Financial Planning: Strategic advice on minimizing tax liabilities and optimizing financial outcomes.
• Property Management: Comprehensive management services to handle all aspects of property ownership, including tax payments.

Contact us today to take advantage of these services and ensure a smooth and compliant property ownership experience in Cyprus!

Understanding property taxes in Cyprus is essential for property owners and investors. Familiarize yourself with key taxes such as transfer fees, stamp duty, capital gains tax, municipal and local taxes, and VAT on new properties. Let our expert team guide you through the process and ensure compliance with all tax requirements.