Berkos Properties & Development

What is property transfer tax in Cyprus (transfer fee)

The buyer becomes a registered owner when he receives a property certificate – a title deed for the purchased property. The new owner has to pay a transfer fee to the Cyprus Lands Department. The total amount depends on the contract value of the property, excluding VAT.
Important Information! From 2016, buyers of new real estate (from the developer) do not have to pay transfer fees in Cyprus.

How much do you have to pay?
The total tax amount depends on the value of the purchased property. The transfer fee is calculated as follows:
1. Up to 85,000 euros of the property’s value – 3%
2. From €85,001 to €170,000 of the property value – 5%
3. From 170,001 euros of the property’s value – 8%.

for example:
The buyer bought a house for €300,000. The total amount for the title deed will be as follows:

€85,000 x 3% + €85,000 x 5% + €130,000 x 8% = €17,200

Transfer fee: €17,200
It is important to note,
For all property sales for which VAT has been paid, transfer fees do not apply. For all other cases, a 50% reduction applies to the amount shown above.

To calculate the total amount of transfer fees for each property, you can do on the official website of the Ministry of Lands and Surveys of Cyprus.

How can you reduce the cost of transferring ownership when buying a property in Cyprus?
Unfortunately, it is not possible to lower the cost of the real estate and save in this case. Since the transfer fee will be paid only after the property’s value has been checked by the land office, according to the location analysis, the object will compare to similar properties in the same area and other characteristics. Therefore, it is not possible to pay part of the money not Official to the seller.

If the property is in joint names, for example, a couple – husband and wife or two individuals, then the purchase is divided into two parts, which bring a reduced transfer fee.

The general calculation formula will remain unchanged, but the total transfer tax will be lower, since the tax payment will be divided between several people.
The following example clearly illustrates this:
The property was purchased for 300,000 euros, in the name of two people. The total fees will be as follows:

(€85,000 x 3% + €65,000 x 5%) x 2 = €11,600 for both

The total savings is €5,600.

For all property sales for which VAT has been paid, transfer fees do not apply. For all other cases, a 50% reduction applies to the amount shown above.

So more people participate in the transaction, then less tax.
No transfer fees will be paid for the properties in the following cases:

In case of reorganization
In case of bankruptcy, liquidation, sale of the pledged item by a lender, when the income does not exceed 350,000 euros for the owner
When transferring a property subject to EU value added tax as standard and discounted rates.
In the event that the property is transferred free of charge, the transfer fee is calculated as follows:
From parents to children – 0%
Between spouses – 0.1%
Between people in the third degree of kinship – 0.1%.