TOUCH BLUE

TAX & RATES

VAT PAYABLE ON PROPERTY
Since Cyprus’ accession to the EU in 2004, VAT must be paid when buying a new build property.

In cases where an application for a town permit was filed before the 1st of May 2004, VAT will not be charged.

If the town planning application has been filed after the 1st of May 2004, VAT is charged on the sales price at a rate of 17%. First-time buyers can apply for VAT reimbursement in cases where they paid the full amount of VAT on single properties purchased after the 1st May 2004.

No VAT is charged on the purchase of land.

IMPORTANT NOTE FOR THE REDUCTION OF VAT TO 5%
A reduced rate of VAT (5%) has been introduced for properties purchased by Cypriots or EU citizens who are permanent residents of Cyprus, provided that the property will be used as the main residence of the purchaser for 10 years (minimum). This is applicable only to contracts of sale which are conducted from October 1^st 2011 onwards.

STAMP DUTY & ANNUAL PROPERTY TAXES AND FEES
In the case of a sales contract, you, as the purchaser, are liable for the payment of Stamp Duty at the rate of 0.15% on any property with a value of up to €170.860,14. Thereafter the rate becomes 0.20%. Stamp Duty is payable within 30 days of signing of the contract of sale.

Example Purchase Price: €200.000
1^st€170.860,14            at0,15%   =€256.30
remaining€29.139,86    at0,20% =€ 58.28
TOTAL Stamp Duty payable€314.58

A.IMMOVABLE PROPERTY OWNERSHIP TAX
As the registered owner of the property, you are liable to an annual Immovable Property Ownership tax calculated on the market value of the property as at 1st of January 1980 (paid by the 30th of September in the year). Immovable Property Tax is payable to the Inland Revenue Department of the Republic of Cyprus.

Rates are as follows:
Value of property (as of 1/1/1980)Rate
Up to €120.000 0
€120.001 - €170.000 0,4%
€170.001 - €300.000 0,5%
€300.001 - €500.000   0,6%
€500.001 - €800.000   0,7%
Over €800.001   0,8%

B. LOCAL AUTHORITY FEES
Depending on the size of your property, local authorities charge between €85 - €256 per annum for regular refuse collection, street lighting, sewerage and similar community services. Communal Services fees are payable to your local municipal authority.

C. MUNICIPALITY TAX
As the registered owner of the property, you are required to pay an annual Municipality Tax, calculated on the market value of the property as at 1st of January 1980. Rates vary from 1‰ - 2‰. Municipality tax is payable to your local municipal authority.

D. SEWERAGE TAX
As the registered owner of the property, you are required to pay an annual Sewerage Tax, calculated on the market value of the property as at 1st of January 1980. Rates vary from 3‰ - 3,5‰. Sewerage taxes are payable annually to your local sewerage board.

TRANSFER FEES

TITLE DEEDS
Transfer of ownership from Vendor to Purchaser is a simple procedure undertaken through the Cyprus Land Registry Office, either by the buyer in person or by appointing a third party with a power of attorney.

By purchasing your property from TOUCH BLUE RESIDENCES, you are guaranteed your Property’s Title Deed.

When the Title Deeds are issued, (a few years after the completion of the project / property) they are always in the name of the Developer (TOUCH BLUE RESIDENCES), and then TOUCH BLUE RESIDENCES transfers the Title Deed of each unit in the name of the purchaser. From the minute your Contract of Sale is deposited at the Land Registry Department, you the purchaser can prevent the owner/developer from transferring the property elsewhere or changing it. Furthermore no burdens, charges or encumbrances can affect your right to seek specific performance after the contract has been deposited with the Land Registry, since you are the beneficial owner.

PROPERTY TRANSFER FEES
Abolition of Transfer Fees for properties purchased until June 1st 2012
Take advantage of the abolition of transfer fees for new properties purchased until June 1st 2012 and save thousands on the purchase of your new luxury home in Cyprus.

After the measure that reduced the VAT rate to 5% for purchasing a permanent residence entered into force on October 1^st 2011, a new amendment regarding the property transfer tax has been approved by the House of Representatives, published on December 2nd 2011, which will remain in force for six months, that is until June 1st 2012.

Example 1      Example 2
No transfer fees payable for properties with VAT.     50% transfer fees payable for properties without VAT.
Property Price €1,500,000        Property Price €400,000
Transfer fee €113,166      Transfer fee €25,166
Transfer fee now €0      Transfer fee now €0
Saving €113,166 Saving €12,583

After June 1st 2012, the Transfer Fees charged will be as before:

Upon transfer of the property and registration in the purchaser’s name, the District Land Registry Office will charge transfer fees. These are based on the market value of the property at the time of purchase and are calculated as follows:
ValueRate
Up to €85.430,073%
€85.431,08 - €170.860,14 5%
Over €170.860,15 8%

Example 1
Purchase price of property, in one name: €200.000

1st €85.430,07at 3% =€2.562,90
next€85.430,07at5%=€4.271,50
remaining€29.139,86   at8%=€2.331,19
TOTAL fees payable    €9.165,59 (4,58% of the purchase price)

For properties owned by a couple or by two individuals, each buyer pays transfer fees on 50% of the property value for each, bringing financial benefit on any property with a value exceeding €85.430,07.

Example 2
Purchase price of property, in two names: €200.000
1st €85.430,07at3%=€2.562,90(share of A)
2nd€85.430,07at3%=€2.562,90(share of B)
remaining of 1st€14.569,93 at5%=€728,50(share of A)
remaining of 2nd€14.569,93 at5%=€728,50(share of B)
TOTAL fees payable    €6.582,80     (3,29% of the purchase price)

Transfer fees - payable only once - are payable at the transfer and registration in the purchaser’s name of the title deed of the property (usually 3 - 5 years after final delivery).