2017 Cyprus Property Taxation

beach-house-1907220_640Numerous alterations have been made to Cyprus’ property tax lately. Below we have outlined how these changes will potentially benefit or influence Cyprus property holders. The changes made to the taxation will be in effect in 2017.

It is mainly believed that the latest alterations made to property taxation in Cyprus will benefit both existing property holders as well as potential property holders.

Immovable Property Tax- in 2016 the Immovable Property Tax was deducted to ¼ of the tax that was inflicted in 2015. The tax was paid at the Tax Department Immovable Property Tax. In 2017, Immovable Property Tax will be stopped.

Property Tax – Property Tax is paid at Municipalities and Communities. This tax has not been altered; therefore, property holders are still subject to property tax. The amount of tax payable is calculated based on the 1980 assessment of the Land Registry that identifies the value of the property.

Property Transfer Fees – this tax was introduced in 2015 and concerned transfers that were made until 31/12/2016. In July 2016, the permanency of the tax was made.

  • In cases where VAT was paid upon the purchase of the property, the holder of the property is not subject to Property Transfer Fees.
  • In cases where VAT was not paid upon the purchase of the property, the property holder is subject to pay ½ the Property Transfer Fee. However, it is important to mention that the Land Registry Director has the capacity to inflict the whole amount of Property Transfer Fee in cases where he believes the purchase price written on the sale’s contract does not reflect the property’s market value upon the date of the purchase.
  • Capital Gains Tax – this tax was implemented in the middle of 2015. Individuals who purchased a property after the tax was introduced were exempted up to 31/12/2016. Nonetheless, individuals who have bought property starting from 2017 are subject to Capital Gains Tax when they decide to resale the property.
  • Stamp Duty – the amount of Stamp Duty that is required to be paid is calculated according to the value stated on the purchase agreement. The rate has not been changed.

The Stamp Duty Rate is as follows:

€0 to €5,000 0%
€5,001 to €170,000 0.15%
More than €170,000 0.2%