It’s not often you get good news when it comes to property tax, but you and your wallet will welcome the recent changes in Cyprus.
Bet you never thought an article around property tax and sewerage rates would provide you with good cheer. Well there’s a first time for everything. Whether you’re planning on buying in Cyprus or you’ve already made your dream a reality, several changes to property taxes there will leave you with more money in your back pocket. Here’s a summary of the news.
Whether you’re planning on buying in Cyprus or bought already, changes to property taxes there will leave you with more money in your pocket
Immovable Property Tax payable to the Tax Department
Having been reduced by a quarter in 2016 the Cypriot Immovable Property Tax has been abolished in 2017. Previously a progressive tax with nine brackets of annual rates based on the value of the property, this tax has been completely removed in favour of a less complex system, helping to maintain the nation’s reputation for straightforward tax laws that promote transparency.
Property Transfer Fees
Back in 2015 temporary reductions in property transfer fees were implemented. A course of action that was made permanent in July 2016, under the following conditions:
(a) If VAT was paid on the purchase price of the property, no Property Transfer Fees are payable.
(b) If VAT was not paid on the purchase price of the property, the Property Transfer Fees are reduced by 50%.
Beware being persuaded by a local seller to do any kind of under-the-table deal under-declaring the value. If the Director of the Land Registry does not believe the price stated on the contract of sale reflects the market value of the property on the date of purchase he can, at his discretion, charge the full property transfer fees based on the Land Registry’s assessment of the market value of the property at the date of sale, minus the price stated on the contract of sale.
Probably not something that’s crossed your mind too many times when dreaming about living in Cyprus, but like taxes sewerage is an unavoidable fact of life. A recent proposal by MP’s to reduce sewerage rates could leave you with more money to spend on meze and zivania.
The updating of property values across the island has been a catalyst for these plans, because sewerage rates are currently calculated based on the market value of a property. Therefore, unless the applicable rate is recalibrated the amount payable to local authorities would skyrocket. Thankfully, MP’s are hopeful a bill reducing the rates will go before the relevant committee shortly.
If you’re ready to buy in Cyprus, you’ll want to work out your budget. To do that you need to know how many euros you will get for your pounds. Click here for a no-obligation currency quote.
The Cyprus Buying Guide covers every stage of the property buying process, sharing our experience and knowledge to ensure a safe and successful property purchase. The guide will help you to: