Transfer fees in Cyprus are costs associated with the transfer of ownership of immovable property (real estate) from one party to another. These fees are paid to the Cypriot government and are calculated based on the market value of the property. Below is a detailed overview of transfer fees in Cyprus, including how they are calculated, who is responsible for paying them, and any exemptions or reductions that may apply.
- What Are Transfer Fees?
Transfer fees are one-time charges imposed by the Cyprus Land Registry when registering the transfer of property ownership. They are separate from other costs, such as stamp duty, VAT, and legal fees. - Who Pays Transfer Fees?
- Buyer Responsibility: In most cases, the buyer is responsible for paying the transfer fees. However, this can be negotiated between the buyer and seller as part of the purchase agreement.
- Buyer Responsibility: In most cases, the buyer is responsible for paying the transfer fees. However, this can be negotiated between the buyer and seller as part of the purchase agreement.
- How Are Transfer Fees Calculated?
Transfer fees are calculated as a percentage of the market value of the property at the time of purchase. The rates are progressive, meaning they increase with the value of the property. The current rates are as follows:
Property Value (€) Transfer Fee Rate- Up to €85,000 3%
- €85,001 – €170,000 5%
- €170,001 and above 8%
Example Calculation
If the market value of a property is €300,000, the transfer fees would be calculated as follows:- 3% on the first €85,000 = €2,550
- 5% on the next €85,001 = €4,250
- 8% on the remaining €129,999 = €10,399
- Total Transfer Fees = €2,550 + €4,250 + €10,399 = €17,199
- Exemptions and Reductions**
Cyprus offers several exemptions and reductions on transfer fees under specific circumstances:- First Property Purchase**
- First-time buyers are eligible for a 50% reduction on transfer fees for properties purchased up to €350,000. This exemption applies to properties acquired between November 11, 2020, and December 31, 2025.
- Family Transfers
- Transfers of property between family members (e.g., parents to children, spouses) are exempt from transfer fees, provided the property is used as the family’s primary residence.
- Property Acquired Before 2013
- Properties purchased before December 31, 2013, are exempt from transfer fees if the buyer has already paid VAT on the purchase.
- Transfers to Companies
- Transfers of property to a company in which the transferor holds at least 99% of the shares are exempt from transfer fees.
- Transfers of property to a company in which the transferor holds at least 99% of the shares are exempt from transfer fees.
- First Property Purchase**
- When Are Transfer Fees Paid?
Transfer fees must be paid to the Cyprus Land Registry at the time of registering the property transfer. The fees are typically paid by the buyer. - Other Costs Associated with Property Transfer
In addition to transfer fees, buyers and sellers should be aware of the following costs:- Stamp Duty: A one-time tax paid by the buyer, calculated at 0.15% to 0.2% of the property value.
- VAT: A 19% VAT applies to new properties (first sale) unless reduced rates or exemptions apply.
- Legal Fees: Fees for legal services, including drafting contracts and conducting due diligence.
- Steps to Pay Transfer Fees
- Valuation Report: Obtain a valuation report from a certified appraiser to determine the market value of the property.
- Submit Documents: Submit the necessary documents (e.g., sale agreement, valuation report) to the Land Registry.
- Pay Fees: Pay the calculated transfer fees to the Land Registry.
- Register Transfer: Once the fees are paid, the Land Registry will register the property in the buyer’s name.
- Why Are Transfer Fees Important?
Transfer fees are a significant cost in the property purchase process. Understanding how they are calculated and whether you qualify for exemptions or reductions can help you budget effectively and potentially save money.
Transfer fees in Cyprus are an essential part of the property purchase process, calculated as a percentage of the property’s market value. While the buyer typically bears this cost, exemptions and reductions are available for first-time buyers, family transfers, and certain other situations. It is advisable to consult with a legal or tax professional to ensure compliance with local regulations and to take advantage of any available benefits.