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Cyprus Property : Tips, Law, Tax, News
Tips on Buying Cyprus Property:
Tips on Renting Cyprus Property
Tips on Selling Cyprus Property:
Cyprus Property - Legal & Tax issues: Cypriots & E.U citizens living in Cyprus - Cypriots and E.U citizens who have their permanent residence in Cyprus (185 days per year or more) are allowed to acquire property without any restrictions. Non E.U citizens - Permission to buy only one property up to 4,014 sq.m. Specific Performance – According to the provisions of Specific Performance Law, the purchaser of immovable property may secure the transfer of the acquired property onto his/her name by depositing a duly signed and stamped copy of the contract at the Land Registry, within two (2) months from the signing of the contract. By depositing the contract in the Land Registry, the purchaser prevents the owner from transferring the property elsewhere or changing it, for as long as the contract is valid and legally effective. No burdens, charges or encumbrances can affect the right of specific performance after the contract has been deposited with the Land Registry. Depositing a copy of the contract to the Land Registry gives the purchaser the right to seek “specific performance” of the terms and conditions of the contract and thus to register the property onto the purchaser’s name, even though the owner may not be willing to accommodate such procedures.Transfer Fees - When registering the property under his/her name at the District Land Office, the purchaser will be liable to pay the following transfer fees, calculated according to the property’s market value at the time of signing of the contracts:
For example a buyer of a property of market value €200,000 will pay €9,166 = €2,563 (3% for €85,430) + €4,272 (5% for €85,430) + €2,331 (8% for €29,140). If a couple is purchasing the property then each will be charged on 50% of the value or €100,000 in this case. This means €3,292 = €2,563 (3% for €85,430) + €729 (5% for €14,570) each or €6,584 total. Stamp Duty - The purchaser is liable for the payment of stamp duty at the rate of 0.15% of the value of the property up to €170,860.14 and 0.20% for over €170,860.14. The contract should be stamped within a period of thirty (30) days from signing. Although the absence of the revenue stamp on a contract does not render it void, the revenue stamp must be paid before depositing the contract to the Land Registry for specific Performance purposes. The stamp duty plus a fine will be payable when the document is produced to the Land Office for the transfer of ownership of property, to any Government department or to the court. In order to avoid the payment of a fine, which could be substantial, the documents should be stamped within 30 days of their signing. Immovable Property Tax - The registered owner of a property has to pay an annual immoveable property tax calculated on the market value of the property as on 1st January, 1980.
Immovable Property Municipality Tax - These charges range from €80 to €200 per year. Capital Gains Tax - 20% on profits from the disposal of immovable property or the disposal of shares of companies directly owning immovable property. The profit is calculated as the difference between the sales proceeds and the original cost of the property. Interest on payments paid for the acquisition, additions to the property and inflation rate, as published yearly by the Government, are deducted. Individuals are entitled to the following lifetime allowances on Capital Gains Tax:
The above allowances are not available separately and an individual claiming a combination of the above allowances is only allowed a maximum lifetime allowance of € 85,430 The following categories are exempted from the Capital Gains Tax: Transfers by reason of death, Gifts between relatives up to third degree, Gifts to limited liability companies when, at the time of transfer and for a period of five years following the transfer, all the shareholders of the company are members of the family of the donor, Gifts by family companies to their members, but only in cases where the property transferred, was obtained by the company as a gift, Exchanges of immovable properties, Compulsory acquisitions, Gifts to charitable institutions or the Republic of Cyprus Communal expenses - payable monthly and vary from development to development depending on the area and type of the property. They cover an immovable property’s owner share of the cost of cleaning and maintaining common areas. Personal Income Tax - All Cyprus tax residents are taxed on all income accrued or derived from all sources in Cyprus and abroad. Individuals who are not tax residents of Cyprus are only taxed on income accrued or derived from sources in Cyprus. An individual is a tax resident in Cyprus if he/she spends in Cyprus more than 185 days in any one year. The following income tax applies to individuals:
Corporate Tax - All companies tax resident of Cyprus are taxed on all their income accrued or derived from all sources in Cyprus and abroad. A non-Cyprus tax resident company is taxed on income accrued or derived from a business activity which is carried out through a permanent establishment in Cyprus. A company is resident of Cyprus if it is managed and controlled in Cyprus. Corporate Tax Rates are 10% for profits up to €1,708,601. Any profits in excess of €1,708,601 are subject to an additional tax of 5%.Double taxation treaties - Cyprus has double taxation treaties with a considerably large number of countries. These treaties may affect favorably the ownership of immovable property in Cyprus and also groups of people who decide to relocate to Cyprus, such as retired residents, employees and business investors. Some of the countries with which Cyprus has entered into double taxation treaties are UK, Ireland, Greece, France, Italy, Russia, Belarus, Romania, China, Austria, Belgium, South Africa, Yugoslavia, Canada, USA and many others.
Cyprus Property News: Don’t miss out! Contact us now: Mr Ioakim Ioakim / tel: +357-99-686618 / +357-22-760051 / info@bullseye-cyprus.com
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