Additional Costs for Buying Real Estate in Cyprus

When considering the purchase of real estate in Cyprus, it is crucial to understand that the initial property price is only one part of the total financial commitment. There are several additional costs associated with buying property that can significantly affect your budget. Below is a detailed breakdown of these costs.

1. Stamp Duty

Stamp duty is a mandatory government fee that must be paid upon signing the sales contract. The rates are as follows:

0% on the first €5,000
0.15% for properties priced between €5,001 and €170,000
0.20% for properties priced above €170,000
The maximum stamp duty payable is capped at €20,000.

This tax must be paid within 30 days after signing the contract.

2. Property Transfer Fees

When transferring ownership of the property to your name at the Land Registry Office, you will incur property transfer fees, which are calculated based on the market value of the property at the time of purchase:

3% for properties valued up to €85,430
5% for properties valued between €85,431 and €170,860
8% for properties valued above €170,860

Currently, there is a 50% discount on these transfer fees if VAT was paid on the property.

3. Value Added Tax (VAT)

If you are purchasing a new property in Cyprus, you will need to pay VAT at a standard rate of 19%. However, there are reduced rates available:

A reduced VAT rate of 5% applies if:
- The buyer is an individual (not a company).
- The property will be used as their primary residence.
- The total value does not exceed €350,000.

The reduced rate applies only to the first 130 square meters of the property.

4. Legal Fees

Engaging a lawyer is essential when purchasing property in Cyprus to ensure all legal aspects are handled correctly. Legal fees typically range from 1% to 2% of the property’s value. These fees cover services such as conducting title searches and drafting contracts.

5. Utility Connection Fees

For newly built homes or those requiring utility connections, expect one-time connection fees for services like electricity and water:

Electricity connection: approximately €75 – €350
Water connection: up to €300
Telephone (landline): around €120.

These fees vary depending on service providers and location.

6. Annual Property Taxes

Once you own property in Cyprus, you will incur ongoing costs such as municipal taxes and communal fees:

Municipal taxes typically range from €100 to €300 per year, depending on location.
Communal fees for apartments or gated communities can range from €500 to €2,000 annually, covering maintenance of shared areas.

7. Insurance Costs

Property insurance is necessary and can cost around €40 per month, depending on factors like location and coverage level. This expense should be factored into your annual budget.

Conclusion

In summary, when buying real estate in Cyprus, it’s essential to account for various additional costs beyond just the purchase price. These include stamp duty, transfer fees, VAT (if applicable), legal fees, utility connection charges, annual taxes, and insurance costs. Proper planning and budgeting for these expenses will help ensure a smooth transaction process without unexpected financial burdens.