The Cyprus real estate tax system is based on the value of the property and is imposed on the owner of the property. The tax is calculated on an annual basis and is paid in two instalments, in June and December. The property tax rate for the year 2022 is as follows:
- 0.20% for properties valued up to €12,500
- 0.25% for properties valued between €12,501 and €40,000
- 0.35% for properties valued between €40,001 and €120,000
- 0.50% for properties valued over €120,000
In addition to the property tax, there is also a municipal tax, which is imposed by the municipality in which the property is located, and a waste management fee, which is imposed by the local community council. Owners of properties that are left vacant for a period of more than six months are subject to a vacant property tax. This tax is imposed at the rate of 0.25% of the property's value per annum.
Cyprus also has an annual immovable property tax, which is imposed on properties that are not used as the main residence of the owner. This tax is imposed at the rate of 15% of the property's value, and it's usually paid by the tenant, unless it is included in the rental agreement.
It's worth mentioning that there are also some exemptions and reductions that are applicable for the property tax and the annual immovable property tax. Such as for properties that are used for agricultural purposes, or for properties that are deemed as heritage sites.
When selling a real estate property in Cyprus, the seller is subject to capital gains tax. Capital gains tax is a tax on the profit made from the sale of a capital asset, such as a property.
For the year 2022, the capital gains tax rate for individuals is 20%. However, there are some exemptions and reductions that may apply to the capital gains tax. For example, individuals who have owned the property for more than 17 years are eligible for a reduction in the capital gains tax rate to 5%. Additionally, if the property is the main residence of the seller and has been used as such for at least 3 years before the sale, the capital gains tax is calculated on the basis of the profit made from the sale after deducting an amount of €85,430. It's worth mentioning that non-resident individuals are subject to capital gains tax only on the profit arising from the sale of property located in Cyprus.
When selling a property, the seller is also required to pay transfer fees, which are calculated based on the value of the property. The transfer fee rate for the year 2022 is as follows: For properties valued up to €85,430: 0.15% For properties valued between €85,431 and €170,860: 0.2% For properties valued over €170,860: 0.25%
In Cyprus, stamp duty is a tax that is imposed on certain legal documents, including real estate contracts of sale. The stamp duty rate for a real estate contract of sale is currently 0.15% of the total value of the property being sold. For example, if a property is sold for €300,000, the stamp duty on the contract of sale would be €450 (0.15% of €300,000). The stamp duty on the contract of sale must be paid by the buyer, and it is typically paid at the time the contract is signed. The stamp duty is imposed on the total value of the property, regardless of the terms of the sale (i.e. cash, mortgage, etc.). It's worth mentioning that there are some exemptions and reductions that may apply for the stamp duty on the contract of sale. For example, if the property is the main residence of the buyer and has been used as such for at least 3 years before the sale, the stamp duty is calculated on the basis of the property value after deducting an amount of €85,430.