How Much Does a Home in Cyprus Really Cost?
Prized for its climate, lifestyle and affordability, Cyprus is a popular market right now. But what are the costs involved in buying a property in Cyprus, including purchase costs and ongoing taxes?
Purchase Costs
In addition to the actual cost of the property there are a few other costs that need to be considered, says Sarah Hordle of Island Homes Cyprus.
There are legal/conveyancing fees of usually a maximum of 1% of the purchase price + VAT. There is also Stamp duty: there is no stamp duty on the first €5,000 of the purchase price then 0.15% of the purchase price on €5,001 to €195,000 and 0.2% on the balance. On a house of €275,000 the total cost is €450.
There is also either assignment tax (only on resale properties) at 0.5% of the purchase price or original sale price (whichever is higher) OR deposition of the contract of sale/registration of ownership: (mainly on new properties) at €50.
Title deed transfer tax: If you are buying a new property with VAT Title Deed transfer tax is not payable when the deeds are ready to transfer. Many resale properties are still in the process of waiting for their full title deed to be issued but as soon as the title deed is ready you will be asked to pay the transfer taxes. If the property you purchase has a ready title deed you will pay this at the land registry on completion and the costs are based on a sliding scale on the value of the property.
The total cost of purchasing a €350,000 resale property in Cyprus would be in the region is €359,600 if in two names. This consists of €600 for the stamp duty, assignment tax of €1,750 (if no title deeds); then a transfer tax of approximately €7,250 – 10% if you’ve already paid assignment tax. So that’s less than 3 % of the property’s value.
Ongoing Ownership - Taxes & Fees
There are however municipality/refuse taxes, to cover other local services and these are based on a property’s 1980 value, meaning a budget of just €300-400 a year should cover them, depending on location. There’s also a sewage tax of €150-400 per year.
Properties within resorts or complexes will incur communal fees. For a two-bedroom apartment, budget €500-€600 a year, depending on facilities. As a rough guide total taxes for a couple owning a three-bedroom house (not on a resort) each year will be approximately €450-600 per year depending on the size and location.
Cost of Living
The average person in Cyprus is expected to live on around €858 a month, according to Numbeo.com, a global consumer price index, which is 11.9 per cent less than the UK.
In the UK, the sum of £43,100 is required for a pensioner to enjoy a comfortable retirement, according to The Pensions and Lifetime Savings Association (PLSA), or £31,300 a year for a ‘moderate’ lifestyle.
A couple living full time in a three-bedroom villa might pay around €100 for electricity, €42 for water, €60 for mobile/broadband. If they are over 65 and residents, they can apply for the Cypriot General Health System (Gesy), which is free, by getting an S1 Certificate from the NHS in the UK. Eating out in local restaurants can also be much more affordable – around €20 per head with drinks.
Tax Benefits
Retirees can choose between a flat rate of 5 per cent tax on pension income (above a tax-exempt allowance of €3,420); or you can be taxed at normal tax rates (after €19,500 personal allowance) of 20 per cent up to income of €28,000, then it rises progressively to 35% for income over €60,000.
The switchover point is around €25,000 [per year] – if your pension income adds up to more than this it’s better to go for the flat rate, advises Blevins Franks, the cross-border financial advisor. There is no inheritance or gift tax in Cyprus.
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