What are the rates of transfer fees in Cyprus, who pays and how they are calculated?
Transfer fees are payable by the purchaser for registering the acquired property on his / her name. Property transfer fees are calculated on the basis of the property’s market value on the date of purchased. This requires that the sale of contract have been deposited at the Department of Lands and Surveys. If the contract of sale has not been deposited at the Department of Lands and Surveys your property’s transfer fees will be calculated on the assessed value of the property on the date the transfer takes place.
Note: The Cyprus Parliament announced the abolishment or reduction of the property transfer fees on the following cases:
1. Total exemption from transfer fees, if the transfer relates to a transaction that is subject to VAT (e.g new build) (e.g. either standard or reduced rate of VAT).
2. In case a transaction is not subject to VAT (e.g resale property), the legislation provides an exemption of 50% on the amount of transfer fees. This exemption is taken into account by the calculator.
3. In case a property is registered as a sole property in a Company & the transaction involves the purchase of that company/property, then the buyer receives a total exemption from transfer fees.
The purchaser bought a house for €300.000. The total amount for title deed will be the following:
€85.000 x 3% = €2.550
€85.000 x 5% = €4.250
€130.000 x 8% = €10.400
Discount 50% (€8.600)
Transfer Fees €8.600
How to save money, buying a property in Cyprus?
Unfortunately, it is impossible to lower the cost of real estate in the contact and save in this case. Because the transfer fee will be paid only after checking the property’s value by the Department of Lands, according to the analysis of the place, the object will compare with similar properties in the same area and other characteristics. Therefore, it is not possible to pay a part of not official money to the seller.
If the property is in joint names e.g., a couple – husband and wife or two individuals, then the purchase is divided into two parts, which result in a reduced Transfer Fee.
The general calculation formula will remain unchanged, but the total transfer tax will be lower, as the tax payment will be shared between several people.
The following example clearly illustrates this:
The property was purchased for €300.000, in the names of two persons. The total fees will be the following:
€85.000 x 3% = €2.550
€65.000 x 5% = €3.250
Total €5.800 x 2 (persons) = €11.600 for both
The total saving is €5.600.
For all those property sales for which VAT was paid, no transfer fees are applied. For all other cases, a 50% reduction is applied to the amount shown above.
Then more people participate in the transaction, then less TAX.
No transfer fee will be payable for the properties in the following cases:
- In case of reorganization
- In case of restructuring
- In case of bankruptcy, liquidation, sale of the pledged item by a lender, where the income is no more than €350.000 per owner
- When transferring property that is subject to EU value-added tax as standard and reduced rates.
In case when the property is transferred free of charge, the Transfer Fee is calculated as the following:
- From parents to children – 0%
- Between spouses – 0.1%
- Between persons of the third degree of kinship – 0.1%