01.01.2017 Cyprus property taxes in 2017
There have been a number of changes to various property taxes in Cyprus in recent times and a summary of the impact of those changes for individuals with property on the island are summarized below.
RECENT changes to property taxes in Cyprus will benefit both those who have purchased property and those planning to purchase.
Here is a summary of the taxes that apply as we entered 2017.
q Immovable Property Tax, payable to the Tax Department Immovable Property Tax (IPT) was reduced in 2016 to approximately a quarter of that in the previous year and is abolished in 2017.
q Property Tax, payable to Communities and Municipalities This ‘local’ property tax has not been abolished and those with property on the island will continue to pay this ‘local’ tax, which is calculated on the Land Registry’s assessment of the 1980 value of the property.
q Property Transfer Fees: The temporary reductions in Property Transfer Fees that that came into force in 2015 and applied to transfers that took place by 31 December 2016 was made permanent in July 2016. (a) If VAT was paid on the purchase price of the property, no Property Transfer Fees are payable. (b) If VAT was not paid on the purchase price of the property, the Property Transfer Fees are reduced by 50%. However if the Director of the Land Registry considers that the price stated on the contract of sale does not reflect the market value of the property at its date of purchase he may, at his discretion, charge the full Property Transfer Fees based on the Land Registry’s assessment of the market value of the property at its date of sale less the price stated on the contract of sale. (The Department of Lands and Surveys has an on-line Transfer Fees Calculator .)
q Capital Gains Tax. The Capital Gains Tax concession introduced in mid-2015 that exempted those who purchased property after it came into force and 31 December 2016 from paying Capital Gains Tax regardless of when the property was sold has not been extended. As a consequence those who buy property in 2017 will be liable for Capital Gains Tax when they sell the property.
q Stamp Duty. Stamp duty is calculated on the value of the purchase agreement and remains unchanged at the rate of: €0 to €5,000 – zero €5,001 to €170,000 – 0.15% Greater than €170,000 – 0.2%* * Capped at a maximum of €20,000.
We expect that we will see further changes to property taxes during the year ahead!
17.09.2016 The amount for citizenship has been reduced
The amount for citizenship has been reduced from 2.5 million euro to just 2 million euro!
The option to invest in Government Bonds is limited to 500.000 euro
The ability to obtain citizenship through bank deposits has been terminated
Collective investment criterion has been abolished. Only personal investment is needed
The parents of the investor may also obtain the citizenship with an extra residential property of 500.000 euro
01.09.2016 Cyprus (EU) passport/citizenship
The Cyprus Government through the Ministry of Interior, has approved the revised criteria for granting the Cypriot citizenship by investment, in an effort to further promote foreign direct investments in Cyprus.
The most important NEW changes are as follows:
- The applicant must have made an investment of €2.0 million (excluding VAT) in any qualifying investment category or a combination as described below (previously it was €5.0 million if applied individually or €2.5 million if applied through a collective investment scheme). The investment in government bonds of the Republic of Cyprus is now restricted to €500,000.
- The applicant must be the holder of a residency permit in Cyprus to qualify for receiving the Cyprus Citizenship. For this purpose, an application for a residency permit should be submitted to the Authorities, which will be issued simultaneously with the filing of the Citizenship application.
- The investor’s parents are entitled to apply for Cyprus citizenship by exception provided that they are owners of a permanent residence of at least €500,000 excluding VAT. For this purpose the investor and his/her parents may acquire one residential property of a total value of at least €1.0 million, excluding VAT (€500,000 being allocated to the investor and the remaining €500,000 being allocated to the parents of the investor).
A. Criteria for granting Cypriot citizenship by exception
Real estate and land developing
The applicant should have a direct investment in Cyprus of at least €2.0 million for the acquisition or development of real estate projects (residential, commercial, tourism or other infrastructure). It shall be noted that the acquisition of land is not considered to be a qualifying investment under this criterion.
Purchase or creation or participation in Cypriot businesses or companies
The applicant must have made an investment of at least €2.0 million in the purchase, creation, or participation in businesses or companies, that are based and operating in Cyprus. These businesses or companies should evidently have a tangible presence and substantial activity in Cyprus and employ at least five (5) Cypriot or EU citizens who have been legally residing in Cyprus for a continuous period of at least 5 years.
Investment in alternative investment funds (AIFs), financial assets of Cypriot businesses or organisations which are licensed by the Cyprus Stock Exchange Commission
The applicant must have purchased financial assets of at least €2.0 million (units in AIFs, bonds, debentures, other securities, etc.) registered and issued in the Republic of Cyprus, in companies or organisations with substantial economic activity in Cyprus which are regulated by the Cyprus Stock Exchange Commission.
Combination of the aforementioned criteria
The applicant may choose to have a combination of any of the above criteria amounting to at least €2.0 million.In the context of this criterion (i.e. combination of investments), the applicant may also purchase governmental bonds of the Republic of Cyprus of a maximum amount of €500,000.
B. Other conditions
It is noted that in addition to satisfying any one of the above criteria, the applicant must:
- Have a clean criminal record; and
- Acquire a permanent residence in Cyprus valued at least €500,000 excluding VAT. (This condition does not apply if the investment is in residential property, under criterion A1 above);
Discover the benefits of investing in Cyprus and acquiring the European citizenship. Contact our well-trained Customer Service team for more information on the immigration programmes of Cyprus and our properties.
01.08.2015 EU citizens review your Cyprus wills
01.08.2015 IPT payment deadline & discount
01.08.2015 A thousand trapped buyers apply for deeds
During the nine days since the ‘hidden mortgage’ law came into force around 1,000 ‘trapped buyers’ who have paid for their property but cannot get their Title Deeds have submitted applications.
By: Editorial Published: Saturday 19th September 2015 •
SOME 1,000 applications have been filed in nine days and thousands more were expected from people who paid for their property but did not have title deeds either because it was mortgaged by the developer, or the state could not go ahead with the transfer because of outstanding taxes. The law aiming to resolve the problem faced by thousands of buyers, foreign and local, was passed on Thursday, September 3, and came into force the next day after its publication in the Government Gazette. “Around 1,000 applications had been submitted by Thursday, September 17 (nine working days),” Land Registry Director Andreas Socratous said. Officials expected an increased flow of applications and requests for information, he added. “Many thousands of people have contacted the department, either through telephone, or email, or they came in person, to ask for information,” he said.
The matter concerns some 78,000 cases of buyers who either do not have a title deed – 48,000 — for various reasons or the property has not been transferred to their name. The law aims to sort out the mess created by the failure to issue title deeds to people who paid for the property, either because the property was mortgaged by the developer, or the state could not go ahead with the transfer because of outstanding taxes. Since developers’ land and buildings are counted as assets that need to be offset against their debt to banks, this gives lenders a claim on people’s properties that had been mortgaged by developers.
The law grants the head of the land registry department the authority to exempt, eliminate, transfer and cancel mortgages and or other encumbrances, depending on the case and under certain conditions. It covers transactions up until December 31, 2014. To be able to apply, buyers must prove they have either paid the seller in full or only a small amount remained outstanding. Also, the sales contract must have been submitted to the land registry. Socratous said the procedure of transferring a property and issuing a title would take at least six to seven months in the best of cases, where titles exist and no serious objections would be raised.