In this article, we will take a look at some of the costs and taxes you will encounter when buying property in Cyprus. Also, you will learn about up-to-date costs as well as how these costs are calculated with the help of 2 examples we have provided.
There are certain costs you will encounter when investing in property in Cyprus. But don’t let these intimidate you. The low costs of property prices, other costs, fees, and taxes incurred during the buying process will offer you a great advantage.
What are some of the costs you will need to pay when buying property in Cyprus?
One of the most frequently asked questions and researched topics by people looking to purchase a flat or luxury villa in Cyprus are the additional costs incurred when purchasing property. Compared to other parts of the world, buying a house in Cyprus is relatively cheap in terms of cost. Because of the low tax fees as well as the affordable property prices in Cyprus, you could easily become a homeowner or an investor looking to purchase property for rental income without emptying your wallet.
Stamp Duty for the Sales Contract
For your sales contract to be legally valid when buying property in Cyprus, a stamp duty fee of 0.5% of the amount of the sales contract must be acquired from the North Cyprus Tax Office. This is relatively insignificant when you consider that a 100,000 GBP sales contract would have a stamp duty of 500 GBP. Remember that stamp duty is always paid by the buyer in North Cyprus.
Land Registry Fee
In previous years, the land registry fee, in other words, transferring the title deed from its previous owner to its new owner, used to be calculated as 6% of the property value on the sales contract, however, you are in luck. For local and foreign first-time property buyers in Cyprus, this percentage has been 3% for a long time. This cost (also paid by the buyer) would be 1,500 GBP for a property valued at 50,000GBP, which is much lower compared to other countries.
Value Added Tax
You will need to pay 5% VAT based on the property value specified on your sales contract when buying property in Cyprus. VAT, which is paid during the registry of the title deeds or during the handing over of the house, depends on the type of property and the professionalism of the seller. In some instances, there is no VAT at all!
Contribution Fee for Power Distribution Unit
In brand new properties completed by professional Cypriot Construction Companies, the cost of foundational services, such as electricity, telephone, plumbing and other services are equally distributed between properties in the project/living complex. This cost, which needs to be paid before the handing over of the key, is usually around 1,000 and 1,800 GBP.
What are some other costs paid when purchasing property?
When buying property, you should not encounter any other fees or costs other than the ones we have listed above. If you are looking to invest in North Cyprus, you will see that buying property is quite easy without having to pay ridiculous amounts of taxes and fees.