What are the costs of buying a house in Cyprus?
When it comes to purchasing a property in Cyprus, there are several financial advantages. Property costs in Cyprus are extraordinarily inexpensive - you can buy a studio apartment in Paphos for as little as €40,000, which is a bargain by any standards.
For property owners, there are also tremendous tax incentives available, with no inheritance tax in Cyprus; and for those who are retired, you may anticipate paying only 5% tax on a foreign pension received in Cyprus.
There's also the Republic of Cyprus' "golden visa" scheme, which provides non-European nationals a Permanent Residency Permits in exchange for investing in real estate in Cyprus*. This program may be of interest to UK nationals, especially after Brexit.
According to the worldwide consumer comparison price website Numbeo, the cost of living in Cyprus is about 19 percent lower than the cost of living in the United Kingdom.
It's no surprise that Cyprus is a popular choice for wise buyers when it comes to investing in property overseas. But, what exactly are the fees associated with purchasing a home in Cyprus?
Cyprus legal costs
When purchasing a property in Cyprus, it is highly recommended that you retain the services of an independent lawyer.
Your lawyer in Cyprus should expedite the acquisition of your home while ensuring that your best interests are protected and that your assets are safeguarded at all times.
Although title deed difficulties are not unusual, your lawyer will need to make certain that any possible problems are handled appropriately and that your property acquisition in Cyprus is secure and legal before moving forward with it.
It is customary in Cyprus to levy legal costs as a proportion of the purchase price of the property, with expenses averaging 1-2 percent (+VAT).
Their services should include conducting a search with the Land Registry Office, checking for planning and building permits, determining whether the land is suitable for building (if applicable), drafting contracts, stamping and registering the contracts, and applying to the Council of Ministers for permission to purchase.
Alternatively, if you require your lawyer to act on your behalf if you need to be out of the country you can give them Power of Attorney, you will be charged a little extra cost for the time it will take to prepare the Power of Attorney, have it certified, have it stamped in the tax office, and then visit the property register to submit it.
Fees charged by surveyors in Cyprus
You should ensure that your selected surveyor is registered with the Cyprus Scientific and Technical Chamber (ETEK), which may supply you with a list of surveyors who are registered with them as well as a guide to the fees they charge.
The typical fee is roughly €500. However, the amount charged varies based on the value of the property and the intricacy of the report requested.
Stamp Duty in Cyprus
When purchasing a home in Cyprus, the buyer is required to pay stamp duty within 30 days after signing the contract.
In the case of properties valued up to €170,000, stamp duty is due at a rate of 0.15 percent of the purchase price and at a rate of 0.2 percent in the case of properties valued over that amount. Stamp duty is not charged on the first €5,000 of a transaction.
VAT is a tax that is levied on property in Cyprus
In addition to Value-added tax, or VAT, all new properties are subject to 19 percent value-added tax (VAT).
The sole exception to this rule is in the case of applications for planning approval that was filed to the planning department prior to the 1st of May, 2004, which are listed below.
Check with the developer before making an offer to see whether this is something that is already included in the asking price.
In addition, purchasers that are using the property as their main residence are subject to a VAT at a rate of only 5 percent. When purchasing "second-hand" property, you will not be required to pay VAT buy you will have to pay Transfer fees.
Fees for transferring ownership of property in Cyprus
Property transfer fees in Cyprus are charged when the title deeds of a property in Cyprus are transferred and registered in your name at the Lands Registry Office in Cyprus by your lawyer, who will then charge you a fee for this service.
It is calculated on a sliding scale ranging from 3 to 8 percent of the property's value, depending on the kind of property, at the moment there is a 50% discount on the final figure.
For example, you pay 3 percent of the purchase price for the first €85,000 in value of a home; between €85,001 and €170,000, you pay 5 percent; and beyond €170,000, you pay 8 percent.
The number of transfer fees in Cyprus might also differ depending on whether a property is acquired in one's own name or in a joint name when purchasing a property.
When a property is acquired in a single name, the purchaser is responsible for the entire charge. If, on the other hand, the property is acquired in joint names (for example, by a husband and wife), the purchase price is divided between the two, and each is taxed individually.
Thus, alone owner of a €170,000 property would pay €6,800 in transfer costs, whereas joint owners would pay €2,550 each, for a total of €5,100 - representing a saving of €1,700!
The amount of transfer fees that must be paid to the government is determined by the estimated worth of the property as determined by the land register on the day of the transfer.
The sales price will serve as a guideline, but the true worth will be determined by comparing similar sales. In this case, it is conceivable that the land registration will value the property you are purchasing at a greater value than the actual purchase price you paid, which is good news for you since this shows your self a bargain.
The best places to buy a property in Cyprus
The location of a house in Paphos is an important feature to consider while acquiring a property in the city.
Homes in more coasty areas of the island might be more expensive than those in further inland. Therefore the location is important. As well as knowing where you want to live, you should be aware of the neighbourhood in which you want to live.
As a result, these are the top three places you'd choose to live if you had the choice:
Peyia is a municipality in Paphos, Cyprus that is located on the country's far western coast. As with Paphos, it is a popular destination for visitors and specialists from the United Kingdom.
Peyia is also a popular residence for not just British citizens but also Russians and more recently, Chinese and German citizens. It is an excellent site for wildlife enthusiasts.
Hilly areas may be found here, as well as the Turtle Bay Nature Reserve, and it is also near to the woods of western Cyprus.
As a result, Peyia is an excellent spot to purchase, rent, or invest in as a vacation rental or a permanent home, since it has everything you need and is quite self-sufficient, with banks, restaurants, and stores all within walking distance.
Just a few of the many reasons why someone might want to live here include the mix of gorgeous scenery and some of the greatest beaches in Cyprus, as well as excellent dining and entertainment options right on your doorstep.
All of this while just being a 15-minute drive from Paphos's city center and a 20-minute drive from Paphos's international airport.
It is possible to earn up to 7% on an investment in a property in Peyia, depending on how the property is utilized and maintained. When comparing apartment prices in Peyia to those in the city center and Kato Paphos, it is estimated that they are around 20% less expensive.
Peyia has the largest number of sales records in the entire province of Paphos, with over 800 transactions in 2018, the majority of which were villas.
Many sales in this market demonstrates that it is a liquid market, and so selling will always be a much simpler operation.
Peyia Hills, developed by Leptos, is one of the most popular projects in the area, as are Vrisoudia Villas, developed by Aristo developers, and Rizza Gardens, developed by Medispa.
There is a decent mix of both apartments and villas, so buying here will fulfill the demands of anybody, whether they are looking for a permanent residence or a vacation property.
Purchasing, selling, and renting real estate in this area is simple since it is in a fantastic location that is popular with both locals and British ex-pats.
With an eye toward long-term investment, a modest two-bedroom apartment would cost 500-600 euros a month, while a three-bedroom villa with a pool would cost roughly 1,200 euros per month (August 2019).
Tala is also suitable for short-term rentals due to its proximity to the popular tourist destinations of Coral Bay and Kato Paphos.
Stephani Village, a modest development consisting of isolated houses from Leptos, is one of the most popular projects in Tala. Other popular projects in Tala include Tala Chorio, Tala Avli, and Tala Avli.
Paphos is the ideal place if you want a property close to the beach with views of ancient ruins in the background while yet being accessible to shopping, bars, and restaurants. In this town, there is a freshly constructed hospital, a top-ranking international school, shopping malls, incredible historical town centers, and even an international airport.