Property Tax in Cyprus

What one needs to know before securing a Cyprus property deal

Dr. Antoine Saliba Haig | Published on 12 Dec 2018

Property Tax in Cyprus

The criteria for the Cyprus Investment Programme involves an investment of €2 million in residential real-estate in Cyprus or an investment of €2.5 million involving a combination of real estate and/or investments. Both must be supplement with a purchase of a private residence of at least €500,000. Upon acquiring property, certain taxes will be due by the buyer, however, certain schemes have been introduced to attract foreign investors to Cyprus.

Cyprus Property VAT (value added tax)

The acquisition of any building or residential property in Cyprus is subject to a standard VAT rate of 19%. However, a reduced rate of 5% was introduced to beneficiaries who meet the following conditions:

  1. Use (or intend to use) the residential property as his/her main and permanent place of residence. 
  2. Submit a declaration to the Cyprus VAT Authorities 
  3. Be a physical person, of 18 years or above, and a citizen of Cyprus or a citizen of another Member State and is a Permanent resident of Cyprus.

In 2012, the reduced rate was extended to persons supplying or constructing residential properties to citizens of third countries, if such residence will be used as a permanent place of residence. The reduced rate cannot be used if the property is being used for investment or leasing purposes, or for other economic activity. In all cases, the rate of 5% will only apply on the first 200m2 of the property, the remaining will be charged at the standard rate of 19%. The said property must serve as the main residence of buyer for 10 years. If this condition is not fulfilled, compensation for the difference in VAT rates must be paid by the buyer.

Other Cyprus Property Taxes

Upon completion of the contract for the transfer of ownership of property, certain one-time taxes must be settled. The purchaser has the responsibility of paying Transfer Fees once the Deed of Purchase has been signed, the rates are based on the market value of the property at the date of purchase:

  • Value up to €85,430 will be charged 3% 
  • Value between €85,431 - €170,860, will be charged 5%
  • Value over €170,861, will be charged 8%

Such transfer fee will not apply if the property purchase has already been subject to VAT.

Stamp Duty is also due on any documentation issued for the acquisition of the property in question. The rates are as follows:

  • 0% for amounts up to €5,000
  • 0.15% for amounts between €5,000 - €170,000
  • 0.2% for €170,000 and higher.

Stamp duty may never exceed €20,000 per agreement; however, penalties may apply if the amount due is not settled within 30 days from the date of purchase.

On an annual basis, every property owner must pay Property Taxes, which includes Local Authority fees and Sewerage Tax. The taxes will be distributed for regular refuse collection, street lighting, sewerage and other community services tax.

Our Cyprus Property & Tax services

The Property and Development team at Chetcuti Cauchi has years of experience providing advice during the entire procedure of buying, selling, renting or developing property in Cyprus. Understanding the market and the procedure held in Cypriot law, our specialised lawyers will consult with clients on residential, commercial, mixed-use and industrial property acquisition. They will also work closely with banks, architects and other parties involved to draft, review and negotiate the conditions upheld in the Preliminary agreement. Our Tax team will also be able to provide assistance in setting up the most suitable scheme for our clients to benefit from.

As a multidisciplinary firm, our Immigration lawyers would also assist throughout the process of application for the Cyprus Investment Programme. Boasting its high success rate, the team will ensure that all investment and residential properties purchased under the programme are up to standard.

Get in touch to get personalised advice!


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Key Contacts

Dr Jean-Philippe Chetcuti

Senior Partner, Global Residency & Citizenship

+356 22056411

Dr Antoine Saliba Haig

Legal Associate

+356 22056446