Costs when selling a property
There are several costs you need to consider before selling your property. Here we will discuss shortly with an easy to follow example what are the main costs.
Your costs usually are:
- Estate Agent Fee (apprx. 5%+VAT of the selling price)
- Solicitor Fee (apprx. 1%+VAT of the selling price)
- Capital Gain Tax (CGT, if applicable)
- Any outstanding fees (e.g. government, communal fees, electricity, rubbish, etc)
Quick example of CGT.
- You purchase a property in 2010 for €100,000.
- You are selling the same property in 2020 for €130,000
- Inflation in 2010 is at 200 and inflation in 2020 is 250 according to Tax Department.
(250/200)*100,000 = €125,000.
So the difference between the selling price and the calculation is your profit.
In this case €130,000-€125,000=€5,000.
Because you are making a profit you will have to pay 20% OF THE PROFIT to the government which in this case will be €1,000.(€5,000*20%)
Also the fee of the estate agent and the solicitor are tax deductable. In the above example if the fee is €5,000 then you will just break even and will not have to pay any tax.
You can find the prices of inflation on the Tax Department of Cyprus here.