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Direct Purchase of Real Estate
This paragraph discusses the most important tax implications of the direct purchase of real estate. It discusses the impact on resident individuals and non-resident individuals, and then the impact on resident companies and non-resident companies.
Transfer Taxes
Real Estate Transfer Fees are imposed by the Land Registry Office to transfer freehold ownership to the Purchaser's name. The transfer fees are due for payment when the transfer of the Title Deed in the name of the Purchaser takes place. The Purchaser is solely responsible for the payment of the Transfer Fees. The rates are on a graduated scale.
Transfer fees do not apply to real estate transactions on which VAT has been imposed. A 50% discount is provided on acquisitions of properties that are not subject to VAT. In the case of company reorganisations, transfers of immovable property are not subject to transfer fees.
Value-added tax
As a main rule, the acquisition of real estate on resale terms is exempt from VAT.
However, the acquisition of a new immovable property is subject to a standard VAT rate of 19%. “New” immovable properties are those which are supplied for first use.
As of 1 October 2011, contracts conducted that relate to acquisitions and/or constructions of residential properties to be used as the primary place of residence of any citizen (Cypriot or not) attract a reduced VAT rate of 5%. The residents shall prove that they intend to stay there for at least the next 10 years.
In such cases, the reduced rate of 5% applies to the first 200 square meters of the residence's buildable area. In cases where the residence is more than 200 square meters, the standard rate applies to the remaining.
As of 8 June 2012, even residents of non-EU Member States are eligible persons, provided that the residence will be used as their primary and permanent place of residence in the Republic.
Stamp duty
The Stamp Duty Law is fully abolished as from 1 January 2026.
Non-resident individuals are treated the same as resident individuals.
Transfer Taxes
The same rules that apply to resident individuals apply.
Value-added tax
The acquisition of new real estate is subject to a standard VAT rate of 19%. The reduced 5% rate described for resident individuals is not applicable to companies.
Transfer Taxes
The same rules that apply to resident companies apply.
Value-added tax
The acquisition of a new real estate asset is subject to the standard VAT rate of 19%, and the VAT is a liability of the acquirer.
Indirect Purchase of Real Estate
This paragraph discusses the most important tax implications of the indirect real estate purchase.
It discusses the impact on resident individuals and non-resident individuals first, and then on resident companies and non-resident companies.
Transfer taxes
No rules apply for transfer taxes when a purchase of real estate is executed indirectly.
Personal income tax
No rules apply for personal income taxes when a purchase of real estate is executed indirectly.
Dividend withholding tax
No rules apply to dividend withholding tax when real estate is purchased indirectly.
The same rules as for the resident individuals apply.
The same rules as for resident individuals apply.
The same rules as for resident companies apply.
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