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Taxes

The Cyprus taxation system is one of the most favorable in the world, both for business and life. The corporate tax for Cypriot companies in the amount of 12.5% is the minimum in Europe. Since the beginning of 2017, the annual property tax in Cyprus was abolished, which contributed to the increasing interest in real estate on the island (it should be noted that the purchase of real estate for a certain amount allows you to get a European passport).

Property Transfer Fee Rate

Property transfer tax is required when transferring unconditional ownership of property in the name of the buyer. The tax must be paid when transferring the title to the buyer. The Buyer is responsible for the tax payment. Rates are set on a graded scale. Often this tax is payable for several years after the purchase.

Property value
Rate
Less than € 85 000
3%
From € 85 001 up to € 170 000
5%
From € 170 001 or more
8%

In case of the joint property, for example, which is issued for a couple (husband and wife) or two individuals, the purchase price is divided into two parts, which leads to a tax reduction.

The following example clearly shows how this particular case works:

When buying property worth 120,000 Euro, the tax payable per person is 4,295 Euro.

Purchase of property for one person
up to € 85 000
3%
€ 2 545
remaining € 35 000
5%
€ 1 750
tax payable
€ 4 295

Whereas when buying property of the same value for two persons, the tax is 3,600 Euro.

Purchase of property for two persons
First € 60 000
3%
€ 1 800 (husband's share)
Second € 60 000
3%
€ 1 800 (wife's share)
Tax payable:
€ 3 600

The reduced VAT rate is subject to the following requirements:

  • The applicant must be an individual (not a legal entity).
  • The applicant (the buyer of real estate) must be at least 18 years old.
  • Real estate should be the main place of residence of the applicant in the Republic of Cyprus. In this context real estate means a house, an apartment or acquired land for the construction of a residential facility.
  • The applicant should not have other property in Cyprus, previously acquired at a reduced VAT rate.
  • Real estate should be used solely as residential real estate, and the applicant should be the first to take the effective ownership of this real estate from the moment of the completion of construction.

Value Added Tax (VAT)

Buying a new property in Cyprus is subject to VAT. Purchase of resale property is not subject to VAT.

The VAT rate on the territory of the Republic of Cyprus is 19%, but when purchasing your first real estate (residential property), a reduced VAT rate of 5% is applied instead of the current rate of 19%.

Stamp Duty

The buyer must pay the stamp duty of the contract price at the following rates:

Contract price
Rate
up to € 5 000
0%
from € 5 001 up to € 170 860
0,15%
More than € 170 860
0,2%

Cyprus has a free market economy, which contributes to a high standard of living for the local population. Over the past 20 years, Cyprus has truly become a commercial, financial and sea center.

You wish to open your business in Cyprus, get European citizenship by investing in the economy of Cyprus, or become a tax resident of the island (provided you stay on the island more than 183 days a year), contact us and we will inform you on the taxes, help you find a Russian-speaking accountant or a lawyer.
Main /

Taxes