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Cyprus Property Taxes in 2017

Cyprus has always been famous for low taxes. It didn’t seem that even better implementations would be on their way soon. Nevertheless, the Government of Cyprus has managed to please property owners. Moreover, annual property tax is high in most countries, but in Cyprus it has been cancelled!

There have been a number of changes to various property taxes in Cyprus in recent times and a summary of the impact of those changes for individuals with property on the island are summarised below.

Recent changes to property taxes in Cyprus will benefit both those who have purchased property and those planning to purchase. Here is a summary of the taxes that apply as we enter 2017.

 Immovable Property Tax payable to the Tax Department

Immovable Property Tax (IPT) was reduced in 2016 to approximately a quarter of that in the previous year and is abolished in 2017.

 Property Tax payable to Communities and Municipalities

This ‘local’ property tax has not been abolished and those with property on the island will continue to pay this ‘local’ tax, which is calculated on the Land Registry’s assessment of the 1980 value of the property.

Property Transfer Fees

The temporary reductions in Property Transfer Fees that that came into force in 2015 and applied to transfers that took place by 31 December 2016 was made permanent in July 2016.

  • If VAT was paid on the purchase price of the property, no Property Transfer Fees are payable.
  • If VAT was not paid on the purchase price of the property, the Property Transfer Fees are reduced by 50%.

However if the Director of the Land Registry considers that the price stated on the contract of sale does not reflect the market value of the property at its date of purchase he may, at his discretion, charge the full Property Transfer Fees based on the Land Registry’s assessment of the market value of the property at its date of sale less the price stated on the contract of sale.

Capital Gains Tax

The Capital Gains Tax concession introduced in mid-2015 that exempted those who purchased property after it came into force and 31 December 2016 from paying Capital Gains Tax regardless of when the property was sold has not been extended.

As a consequence those who buy property in 2017 will be liable for Capital Gains Tax when they sell the property.

Stamp Duty Stamp duty is calculated on the value of the purchase agreement and remains unchanged at the rate of:

  • €0 to €5,000 – zero
  • €5,001 to €170,000 – 0.15%
  • Greater than €170,000 – 0.2%

Projects from this area

Marsalite Villas. Cyprus

The location is only 15 minutes away from the captivating bustling streets of Paphos, and only 10 minutes away from the secluded beaches and lagoons of the Akamas peninsula. It offers you the choice of being as near or as far from civilisation as you wish. With Coral Bay just down the road, you have easy access to local tavernas offering  fine cuisine, supermarkets supplying fresh produce and amusement parks providing entertainment for the whole  family, all of which makes the Marsal-ite project the ideal location for your property.

The project consists of nine elite villas built to anexquisite standard which is unmatched any where else in Cyprus. Each house has its own unique panoramic view of the coastline, large private pool, spacious garden and large plot of land. During the construction of your home, we pay special attention to issues concerning thermal insulation, meaning your home will be coolin the summer and warm in the winter while your costs remain minimal, despite the every increasing energy prices. This exclusive development offers luxurious and superior comfort equipped with modern technologies and astate of the art building style.

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Secret Hill, North Cyprus

There is a distinct gap in the North Cyprus hotel market for good quality family holidays and activity holidays, and Secret Hills Hotel & Spa Resort is designed to fill that gap. The Resort is located in an ideal position to give access to facilities including beaches, the spectacular countryside and mountains, many historical sites and the Karpaz Peninsular.

Due to the beautiful climate on the island and the wide range of facilities the Resort will offer, both indoor and outdoor, strong occupancy rates are highly achievable for much of the year. The style, size and flexibility of the accommodation will command strong room rates, which along with food and beverage supply will all serve to boost profits and priority dividend income for investors.

Investment is made through the ownership of Shares in the Hotel Resort Company itself. So investors will benefit from the Capital Growth in the business value and also from dividends generated by the business’ profits. This dividend income will come from the room rental rates and in addition to this (unlike some other property investments on the market), you will profit from all other sources of income that the resort can generate, such as; food and beverage, shops, spa, excursions and so on.

Share prices will rise throughout the build period, giving greater reward for early investors. All prices are in £ Sterling, avoiding any currency exchange issues and costs for the investor.

The investment is structured through a Private Limited Company in the Isle of Man, and as such gives great potential tax advantages. Being a British Crown dependency this provides added security as a low-taxed financial centre versus “tax havens” further afield. As an Investor in Secret Hills (IoM) Ltd, you will benefit from priority dividends. In the event of a sale of the Resort business, investor shareholders also receive their Capital return ahead of others.

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Click here to see all the projects from this area.