Taxes and Fees When Buying Property in Cyprus

Buying property in Cyprus has long been attractive to both local buyers and international investors. The island offers year-round sunshine, a relaxed lifestyle, and a secure legal system that is based on English common law. At the same time, it provides a wide range of real estate opportunities: from modest apartments for personal use, to luxury villas, whole blocks of flats, prime land plots, and entire development projects.

However, while Cyprus is a wonderful place to own property, many people underestimate the true cost of buying and owning. The purchase price is only one part of the equation. To make an informed decision, it is essential to understand all the taxes, fees and ongoing costs that come with property ownership.

At Investments.cy, we help individuals and companies navigate these costs so they can plan effectively and avoid unpleasant surprises. This guide will walk you through every aspect of buying and owning property in Cyprus: the one-off purchase costs, the ongoing ownership expenses, and the potential taxes that may arise when selling in the future.

1. Understanding the Purchase Price

The starting point is, of course, the price of the property itself. Sellers in Cyprus typically market properties in euros, and negotiation is common. The final purchase price you agree upon with the seller or developer will form the basis on which most other fees and taxes are calculated.

For example, if you buy a new apartment at €200,000, this figure will affect VAT (if applicable), transfer fees, and legal charges. If you purchase a resale villa at €500,000, the same applies.

While the price is always the largest expense, it is rarely the final number you will pay. This is why understanding the additional charges is so important.

2. VAT on Property

Value Added Tax (VAT) is often the most significant cost after the property price itself. Whether or not you pay VAT depends on the type of property you are buying:

• New property (first sale from a developer): Subject to VAT at the standard rate of 19%.
• Resale property (already owned, not first sale): Not subject to VAT.

Reduced VAT Rate of 5%

Cyprus offers a reduced VAT rate of 5% on new properties if certain conditions are met. This is designed to help individuals and families purchase their primary residence. To qualify, the buyer usually must:

• Intend to use the property as their main and permanent home.
• Not already own another home in Cyprus that serves as a permanent residence.
• Apply for the reduced rate with the authorities before the purchase is completed.

The reduced rate applies only to the first 200 square metres of buildable area (subject to the law at the time of purchase). Any area beyond that is charged at the standard 19% rate.

For example:

• If you buy a 180 m² new villa, the entire property may qualify for 5% VAT.
• If you buy a 300 m² new villa, the first 200 m² is charged at 5%, and the remaining 100 m² at 19%.

This distinction makes a huge difference to your budget and is one of the areas where buyers often make mistakes. At Investments.cy, we ensure that clients understand their eligibility for reduced VAT and handle the paperwork correctly.

3. Stamp Duty

Stamp duty is payable on the contract of sale and is one of the smaller, yet unavoidable, costs of buying property in Cyprus. The amount is calculated on the purchase price and is applied at tiered rates.

• On the first €5,000 of the purchase price: 0%.
• From €5,001 to €170,000: 0.15%.
• On amounts above €170,000: 0.20%.

Let’s take an example. If you buy a property for €300,000, the stamp duty would be calculated as follows:

• First €5,000 = €0
• €5,001 to €170,000 = €165,000 × 0.15% = €247.50
• €170,001 to €300,000 = €130,000 × 0.20% = €260

Total stamp duty = €507.50.

Although the amounts may not be huge compared with VAT or transfer fees, they must still be paid in order for the contract to be legally recognised and registered.

4. Property Transfer Fees

The property transfer fee is paid to the Land Registry when the title deeds are transferred into your name. This fee is based on the market value of the property, not always the purchase price. The Land Registry has the authority to assess whether the declared price reflects true market value.

The rates are:

• Up to €85,000: 3%.
• From €85,001 to €170,000: 5%.
• Above €170,000: 8%.

These percentages apply in bands, not to the entire amount. For example, for a €300,000 property:

• First €85,000 at 3% = €2,550
• Next €85,000 at 5% = €4,250
• Remaining €130,000 at 8% = €10,400

Total transfer fee = €17,200.

Reductions and Exemptions

• If VAT was paid on the purchase, no transfer fee is charged.
• In many cases where VAT was not paid, the government applies a 50% reduction on transfer fees. Using the example above, the total could be reduced to €8,600.

This is an area where buyers often save thousands of euros with proper guidance. At Investments.cy, we assess each transaction carefully to ensure the lowest possible transfer fee is applied.

5. Legal and Professional Fees

It is essential to appoint an independent lawyer when buying property in Cyprus. Your lawyer will:

• Conduct due diligence checks on the property.
• Verify ownership and ensure there are no mortgages or charges against it.
• Review the sales contract and protect your interests.
• Register the contract with the Land Registry.

Legal fees usually amount to 1% to 2% of the purchase price, though this can vary depending on the complexity of the transaction. Some lawyers may also charge fixed amounts for certain tasks.

Other professional fees may include:

• Surveyor or valuation costs.
• Notary fees for certifying documents.
• Translation services if required.

Although these fees are smaller compared with the main taxes, they are vital for ensuring your purchase is legally sound and problem-free.

6. Other Upfront Costs

In addition to the main fees outlined above, there are a number of smaller costs that buyers should anticipate:

• Land Registry charges for registering documents.
• Power of attorney fees if you cannot attend in person.
• Bank or mortgage fees if financing is involved.
• Currency exchange charges if transferring money from abroad.

Individually these may seem minor, but together they can add several hundred to several thousand euros to your budget.

7. Ongoing Ownership Costs

Once the property is yours, there are continuing expenses you must budget for. These vary depending on the type of property, its location, and your intended use.

Municipal Taxes and Levies

Local municipalities and village councils charge annual fees for services such as refuse collection, street lighting, and sewerage. These are typically modest, often ranging from €90 to €300 per year, depending on the property size and location.

Communal Charges

If you buy in a development with shared facilities—such as a swimming pool, gardens, lifts, or security—you will be required to pay communal fees. These cover the maintenance and running of the shared spaces.

The amount varies widely: a small apartment might cost a few hundred euros per year, while a luxury villa in a gated complex could cost several thousand.

Utilities

As an owner, you are responsible for electricity, water, internet and other services. Cyprus has modern utility systems, and charges are based on usage. Expect bills similar to those in most European countries.

Insurance

While not mandatory, property insurance is strongly advised. Policies can cover fire, natural disasters, burglary, and liability. Annual premiums depend on property value and location but are generally reasonable.

Maintenance

Every property needs upkeep—painting, repairs, servicing of equipment such as air-conditioning or lifts, garden care and so on. For holiday homes, you may also require property management services if you are not based in Cyprus.

8. Taxes on Sale or Transfer

At some point, you may decide to sell your property. When that happens, the main tax to consider is Capital Gains Tax (CGT).

Capital Gains Tax (CGT)

Cyprus charges CGT at 20% on the profit made from selling a property. The gain is calculated as the difference between the sale price and the original purchase price, adjusted for inflation and allowable expenses such as transfer fees, legal costs and improvements.

Allowances and Exemptions

Each individual has a lifetime exemption on the first €17,086 of gains. There are larger exemptions if the property has been your main residence for a minimum period, or if it has been transferred within a family.

Careful planning can therefore reduce or even eliminate CGT. This is another area where expert guidance pays off.

9. Inheritance and Gift Taxes

Cyprus abolished inheritance tax in 2000, which means property can be passed to heirs without additional taxation. This makes Cyprus particularly attractive for long-term family investment.

However, when transferring property through a gift, transfer fees may still apply, though often at reduced rates.

10. Why Work With Investments.cy

The above overview shows that while Cyprus remains a very attractive property market, the costs can be complex. For an ordinary buyer, trying to understand all the rules and calculate the true budget can be overwhelming.

At Investments.cy, we specialise in guiding investors through the entire process:

• Clarity on costs: We provide a detailed breakdown of every expected expense, tailored to the property you are buying.
• Access to expertise: We work with trusted lawyers, surveyors, and service providers, ensuring smooth transactions.
• Negotiation and savings: Our knowledge of government schemes, VAT reductions and transfer fee discounts can save you thousands.
• Peace of mind: With us, you avoid hidden pitfalls, unexpected bills, or problems with title deeds.
• End-to-end service: From selecting the right property to handling paperwork and after-sale management, we are there every step of the way.

For many people, the difference between a stressful purchase and a successful investment lies in having the right local partner. That is what we provide.

11. Practical Example

Imagine you are buying a new apartment in Limassol for €250,000 as your main residence. What would your costs look like?

• Purchase price: €250,000
• VAT: 5% (assuming eligibility) = €12,500
• Stamp duty: about €467
• Transfer fee: waived (because VAT is paid)
• Legal fees: around €2,500
• Miscellaneous fees: approximately €500

Total upfront costs: about €265,967.

Now compare with buying a €250,000 resale property:

• Purchase price: €250,000
• VAT: not applicable
• Stamp duty: about €467
• Transfer fee: approximately €7,600 (after 50% reduction)
• Legal fees: around €2,500
• Miscellaneous fees: approximately €500

Total upfront costs: about €261,067.

This example shows how VAT and transfer fee rules can shift the balance between new and resale properties.

12. Final Thoughts

Cyprus offers an excellent environment for property investment, whether you are looking for a home, a holiday retreat, or a long-term rental income opportunity. The costs are transparent once you know them, and the absence of annual property tax and inheritance tax makes Cyprus especially appealing.

The key is to budget properly, seek expert advice, and work with professionals who know the system. At Investments.cy, we make the process clear, cost-effective, and secure.

FAQs

What is the property transfer fee in Cyprus?
It is a fee charged by the Land Registry when the title deeds are transferred into your name. It is calculated in bands: 3% on the first €85,000, 5% on the next €85,000, and 8% on anything above that. Reductions often apply, and if VAT has been paid, the fee may be waived altogether.

Do I pay VAT on property in Cyprus?
Yes, if you buy a new property from a developer. The standard rate is 19%, but a reduced 5% rate applies under certain conditions for a main residence. Resale properties are not subject to VAT.

Are there annual property taxes in Cyprus?
There is no national annual property tax. However, local municipalities charge annual rates for services such as rubbish collection and street lighting. If your property is in a complex, you will also pay communal fees.

Do foreigners pay more tax when buying?
No. The same rules apply to both locals and foreigners. The only differences arise from eligibility for reduced VAT or certain administrative requirements for non-EU citizens.

What other costs should I budget for besides price?
You should allow for VAT or transfer fees, stamp duty, legal fees, surveyor costs, insurance, utilities, communal charges (if applicable), and maintenance. Together these can add a significant percentage to the purchase price, so careful planning is essential.