Double Taxation Agreements
Cyprus has double-taxation agreements with Austria, Belarus, Belgium, Bulgaria, Canada, China, the Czech Republic, Denmark, Egypt, France, Germany, Greece, Hungary, India, Ireland, Italy, Kuwait, Kyrgyzstan, Malta, Mauritius, Norway, Poland, Romania, Russia, Singapore, Slovakia, South Africa, Sweden, Syria, Tajikistan, United Kingdom, United States, Yugoslavia (former, now Serbia).
The main purpose of these treaties is the avoidance of double taxation of income earned in any of the above countries. A credit is usually allowed against the tax levied by the country of the tax payer’s residence for taxes levied in the other country. Treaties are under negotiation with another 23 countries.
Duty Free Privileges
Europeans who become permanent residents in Cyprus and were using in their country a car for at least six months, can bring their car to Cyprus and they will not pay import tax. Furniture can be imported free of any taxes by Europeans or Non-Europeans who become permanent residents provided that they are for personal use and are not brand new.
Transfer Fees based on Land Registry Office evaluation:
- Up to €85,430.07
- 3% fees
- €85,430.07 – €170,860.14
- 5% fees
- Over €170,860.14
- 8% fees
Immovable Property Tax
The annual immovable property tax is calculated on the market value of the property as assessed on 1st January 1980 and it refers to the immovable property registered in the name of the taxpayer on 1st January of each year. The rate of taxation is as follows:
|Market value of Property (CYP)||Annual Property Tax (%)|
|Up to 170,860.14||Exempt|
|From 170,861 to 427,150.369||2.5|
|From 427,151 to 854,300.72||3.5|
Capital Gains Tax
On disposal of the property, capital gains tax will be payable at the rate of 20% on the gain with the first €17086.01 being exempt for each person. The gains are the difference between the sales proceeds and the original cost of the property. In the case of a property which was purchased before 1/1/1980, the gains are the difference between the sales proceeds and the market value of the property as of 1/1/1980.
On top of this allowance, the seller is entitled to a further allowance regarding the transfer fees paid, inflation rate per year and the cost of any additions made to the house. In sales of property used as a residence by the vendor, the first €85,430.07 of the sale price are exempt, provided that he has been using the same as his residence for at least 5 years prior to the sale.
The purchaser is liable for the payment of stamp duty upon signing the contract. This should be paid within 30 days of signing the contract.
- Up to € 170,860.14
- 1.5% – e.g. € 256.29
- Over € 170,860.14
A rough guide could be approximately € 85 -250 per year depending on the size of your property. This tax is for refuse collection, street lighting, sewerage, etc.
The basic utilities, electricity, water and telephone are payable individually in accordance with the consumption and based on a meter reading.
Since 1/5/04 a statute in respect of VAT on properties was introduced. In addition to other amendments, this statute introduced VAT on the rate of 15%. Properties with building permit before 01/05/04 are exempted of V.A.T.
For more information on the value of a property contact the Cyprus Association of Professional Quantity Surveyors.