Since purchasing a house in Cyprus may be very expensive, we’ve engaged our property specialist, Richard Way, to conduct a bit of in-depth study.
There are no notary fees charged in Cyprus because the country does not use a notarized property transfer system. Transfer tax is outlawed when the property is resold, and the maximum rate is eight percent if the sale price is over €170,000.
In this situation, transfer tax would be €21,200 for a €350,000 home, Esme Palas, an attorney with Michael Kyprianou & Co., told us. The tax is cut by 50% under current legislation, and hence it would be around €10,600.
Buyers should be aware that in Cyprus, only on the day of the title transfer is the amount of transfer tax due conﬁrmed; as the tax is based on a land registry assessment of the property, not the purchase price (although typically these two match). An additional expense to the acquisition includes the €4,165 (1% of the purchase price) in separate legal fees, €620 in stamp duty, and €120 in other disbursements. A €350,000 resale home in Cyprus would have a total purchase price of around €365,505.
taxes and fees tied to ownership
This means that a new type of property tax, known as Immovable Property Tax (IPT), will not be applied in Cyprus for 2017. If you are within the boundaries of a municipality or community, there may be taxes to fund the services provided by the local government. These taxes are based on the property’s 1980 market value, which means a budget of €250 to €350 annually should cover the local services, depending on location.
Common fees will be levied on properties located inside resort or condominium complexes. Budget €400-€600 a year for a two-bedroom apartment in Paphos, with a possible additional expense of €150 to €250 if a lift and gated entry are available, according to Scott Toulson of Sunshine Luxury Villas. At the luxurious Aphrodite Hills Resort, you should expect to pay more due to all of the facilities, including a golf course, spa, tennis school, and many communal pools. Fees start at €1,500 and go up to €3,000 per square meter.
housing, food, and clothing costs
According to Numbeo.com, the consumer price index in Cyprus is 22% lower than in the UK. On the website, restaurant and grocery prices are 24% and 19.5% cheaper than in the UK, while utilities are 40% cheaper.
In my 15 years of living in Cyprus, the cost of living is around 20% lower than in the UK. Although overall, the cost of goods and services is below the EU average, some products are far more expensive than others, with dairy products in particular being much more expensive than the UK. The utility costs are often lower in the UK than in the United States. However, operating air conditioning equipment all day can result in substantial electrical expenditures, particularly during the hot summer months.
Rules for Rental
In the Cypriot code of laws, it is stated that only tourist accommodation property classified by the relevant planning authority in Cyprus can be rented to tourists. Finally, the property owner should contact the Cyprus Tourism Organisation (CTO) and receive a licence to operate, which will be issued as long as the property maintains specific health and safety criteria. On the one hand, CTOs’ requirements for renting are quite stringent, while on the other, the government is researching modifying these rules. For non-residents, significant allowances and tax exemptions are in place, and there is no tax liability on the first €19,500 of rental income. From there, the tax rate increases according to the amount of revenue. Cyprus and the UK have a double taxation treaty.
Gift and inheritance taxes do not exist in Cyprus.