Its strategic position, natural beauty and the richness of Cyprus have proclaimed the island a jewel in the Eastern Mediterranean.
The Republic of Cyprus is a country with a very favorable taxation system and this constitutes one of the top options for investment and business all over the world.
This beautiful island offers visitors a wonderful living experience that combines a comfortable and stress free way of life with a modern and sophisticated environment, ideal for people looking for the perfect balance between business and pleasure.
Buying Cyprus property as an investment
Cyprus has been of an outstanding historical significance due to its favorable geographic location in the Mediterranean. The natural beauty, attractions, curative climate and low prices – comparing to European standards, make Cyprus the optimum destination for holidays or permanent residence. Cyprus is considered as one of the most top property destinations for the real estate sector. Local property is believed to offer good value for money and the island’s increasing popularity by the international market further supports this as well as due to the favorable policy to obtain a permanent residence through the purchasing of real estate.
The low cost of living, high quality of lifestyle, the increasingly important role of safety and security, also make it an ideal destination for retirement.
The legal system in Cyprus is based on the British equivalent and protects the purchaser’s rights in many ways. Once the agreement of the property sale has been signed and deposit has been paid, the land registry provides a simple and effective legal instrument called the ”Specific Performance” which protects the purchaser’s ownership rights until the title deeds are issued and transferred to their name; the property therefore cannot be leased, sold, mortgaged and this status can only be altered by the purchaser himself.
The VAT rate is 19%.
Cyprus Immovable Property Tax
Immovable Property Tax has been abolished as from 1 January 2017. Until tax year 2016, the owner of immovable property situated in Cyprus was liable to pay an annual IPT which was calculated on the market value of the property as at 1 January 1980, at the varying rates as noted in the table below, which apply per owner and not per property. As from 1st January 2013, the bands and rates for Immovable Property Tax for properties situated in Cyprus had been revised as per the table below which applied on a per owner basis (not per property). Property owners whose property had a total value of €12.500 or less (on the basis of 1.1.1980 values) were exempt from Immovable Property Tax.
Capital Gains Tax
Capital Gains Tax (CGT) is imposed (where the disposal is not subject to income tax) at the rate of 20% on gains from the disposal of immovable property situated in Cyprus including gains from the disposal of shares in companies which directly own such immovable property. Further, as from 17 December 2015 shares of companies which indirectly own immovable property located in Cyprus and at least 50% of the market value of the said shares derive from such immovable property are subject to Capital Gains Tax. In the case of share disposals only that part of the gain relating to the immovable property situated in Cyprus is subject to CGT
Inheritance Tax has been abolished with effect 1 January 2000, and is no longer imposed.
Local Authority Tax (Council Tax)
The local council property tax is paid annually. The tax collected by the municipality covers for garbage collection, street lighting etc. Fees vary depending on the size of the property. Local Authorities charge between €85 – €300 for regular refuse collection, street lighting, sewerage and relevant community services (Communal Services), depending on the size of the property. Communal Services’ fees are payable to the local Municipal Authority.
Communal expenses cover an owner’s share towards the cost of cleaning and maintaining a project’s communal areas, gardens, swimming pool, management fees, and repairs. These costs are payable in predetermined installments during the year and vary between developments and properties.