a)When and why
The passing of the Lands and Surveys Department (Fees and Rights) (Amendment) (No 2) Law, has made the reduction in such transfer fees of immovable property in Cyprus now possible and permanent. This is the new order of things since the 14th July 2016. The Law concerns the transfer and issue of separate title deeds of immovable properties purchased in Cyprus and constitutes a key component in a series of measures that aim at attracting new investors, both domestic and foreign, as well as wall as focusing on the regeneration of the construction industry. Furthermore, this enables purchasers to obtain title deeds for their properties in Cyprus and to pay no transfer fees or reduced transfer fees, zero capital gains tax for properties purchased up to 31/12/2016.
b)When does the Law apply:
1.To all cases where a contract of sale to purchase a property was deposited at the relevant District Land Registry Office on or before 31st December 2014.
2.Buyers who failed to deposit their contract of sale can still benefit from the law, provided they obtain a court order to allow them to deposit their contract of sale at the relevant District Land Registry Office.
3.Where a title deed for the property has already been issued and the purchaser has fully paid the purchase price and has duly conformed with every other obligation under the contract of sale then the Land Registry Office shall transfer the title deed of the property in the name of such a purchaser albeit the existence of any mortgage or charge due to the seller.
4.Where a title deed has not been issued yet, and the purchaser has duly paid the purchase price and conformed with all of his obligations under the sale of contract, then he can proceed to the transfer of the title deeds of his property in his name along with the filing of another application for the update of the title deeds that will make the issuing of separate transfer deeds even faster. This is so, irrespective of the existence any mortgage or other charge on the property.
c)Transfer Fees
Purchasers of immovable property in Cyprus that have paid VAT on the purchase price of their property will not incur any transfer fees if such transfer takes place until 31/12/2016.The provisions regarding the 50% reduction in the payment of transfer fees apply as well to new purchases of properties for which the transfer of title deeds takes place until 31st December 2016.
- Purchasers of immovable property must pay transfer fees within 60 days of a notice to transfer the property.
- If the purchaser pays within the 60 days, he will benefit from an additional 10% reduction on the transfer fees over and above the reduction of 50% on transfer fees already provided if these are paid before the 31st December 2016.
- The purchaser also has a choice of paying the transfer fees in 12 monthly installments.
d)Capital Gains Tax
Αny sale of immovable property in Cyprus that will have been purchased between 16th July 2015 - 31st December 2016 will have 0% capital gains tax.
e)The Fees
The transfer fees are calculated on the basis, of the market value of the property as at the date of the transfer and are payable at the time of the transfer.
The rates are:
Value of Property € Transfer fees rate %
€ 0 – €85,430.07 3%
€85,430.08 – €170,860.14 5%
over €170,860.15 8%
Properties purchased between the 2nd of December 2011 and 31st December 2016, which are subject to VAT will be exempt from the above transfer fees. Properties not subject to VAT will be eligible for a 50% exemption from the above transfer fee.
Conclusion
With the above mentioned newly introduced changes and the new series of measures and incentives in the area of property investment in Cyprus, it is evidently an excellent time for investing or otherwise dealing with Cyprus land property.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
