|
|
| |
|
|
Tel UK:
01333 730405/6
Mobile:
07976912360
Cyp:
(00357) 26911783
|
|
|
Click here to bookmark us!
As with the purchase of a home in any part of the world, there are Legal
& Taxation costs associated with buying your home in Cyprus, these
are normally handled by your solicitor where tax is associated with the
purchase or sale of a home, or in the case of local taxes, these are payable
direct by yourself to the Municipality (council). You will incur solicitors
costs for the purchase, conveyance and all completion and mortgage formalities,
these depend upon the property you are buying, but typically for a 2 bedroomed
apartment are in the region it is CYP£ 600-900.
Value Added Tax (VAT)
This is included in the price of New Homes only and is borne by the vendors,
unless the license to build was granted before 30/4/2004 and the property
is not yet completed, in which case the property is VAT exempt. VAT
will be added to the cost of land purchased from 01/07/2008 at a rate yet
to be confirmed.
Example in 3rd table on left side should be for a property 95,000.
Inheritance Tax
This is not an issue in Cyprus.
Council/Municipality Taxes
Similar to the current Council Tax system in the UK . The registered owner
of immovable property is liable to minor Municipal or Village tax regulations
which vary from area to area, the size covered and services provided.
This tax provides for local issues such as sewerage, refuse collection
and street lighting. Currently these range from CYP£ 50 to CYP£120
per annum (less than ONE MONTHS council tax in UK ).
|
Property Stamp Duty
(PSD)
This is paid to the Land Registry after the sale agreement is
signed, this is paid via your solicitor.
Currently the rate is CYP£1.50 per thousand up to a value
of CYP£100,000 and thereafter it is CYP£2.00 per thousand.
Example for a purchase of house price CYP£120,000
| |
Rate % |
CYP £ |
First CYP£
100,000 |
1.50 |
150.00 |
Next CYP£
20,000 |
2.00 |
40.00 |
| Total |
|
190.00 |
|
Immovable Property Tax (IPT)
This is the annual ownership tax based upon the value of the property
thus:
Value of property CYP£ Annual Tax %
| Up to |
100,000 |
Exempt |
| 100,001 |
250,000 |
0.25 |
| 250,001 |
500,000 |
0.35 |
| 500,001 |
over |
0.40 |
The IPT is based on the assumed valuation of the property in
1980 which is clearly much lower than today’s market value.
So the vast majority of properties there is no IPT |
Property Transfer Tax (PTT)
This is paid to the Land Registrar in order to transfer the Freehold
ownership into your name in the Land Registry. This normally takes
place after about 3 years from the purchase, or when a property
is 3 years old. The rate is in bands as follows:
| Value of property |
|
Transfer rate % |
| from |
to |
|
| 0 |
50,000 |
3 |
| 50,001 |
100,000 |
5 |
| 100,001 |
over |
8 |
So a purchase at CYP£95,00
| First 50,000 |
3% |
1,500 |
| Next 45,000 |
5% |
2,250 |
| |
Total |
3,750 |
However if a purchase is joint then the Value is halved:
| First 47,500 |
3% |
1,425 |
| Next 47,500 |
3% |
1,425 |
| |
Total |
2,850 |
|
Cyprus has Taxation treaties with 34 countries
for the avoidance of double taxation of Earned Income. This means
that those who are resident in Cyprus can choose to be taxed in
Cyprus and not in the country of origin, where rates may be higher.
To be classed as a resident, a person must be physically present
in Cyprus for a period of six months (183 days) of the year. The
permit is easily obtained for persons living in Cyprus who have
purchased a property and/or is EU Nationals. Residence permits
can be granted to an applicant who satisfies the authorities that
they have a secured income (e.g. Pension, investment, earned income)
of sufficient amount to be self supporting and presently this
happens after a continuity stay of 6 months.
Pensioners that
receive pensions in Cyprus are liable to pay tax only if it exceeds
CYP£2,000 per annum and the amount over this is taxed at
a flat rate of 5%. |
Resident individuals are
liable to tax on their worldwide income (earned within and outside Cyprus
) and non resident are liable to tax only on income earned within Cyprus
. As from 2005 the income tax rates are:
| From CYP£ |
to CYP£ |
Rate % |
| Zero |
10,000 |
Zero |
| 10,001 |
15,000 |
20% |
| 15,001 |
20,000 |
25% |
| 20,001 |
over |
30% |
Business Investors. Foreign
individuals and companies that acquire property in Cyprus take advantage
of the taxation benefits (corporation tax of 10%) and other commercial
privileges that are on offer.
|
