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Cyprus Government Abolishes Property Tax Read More
Reduction on VAT - for new
build properties.  Read More

Cyprus Property News 

 

CYPRUS TAX NEWS - 12th July 2013- Immovable Property Tax !!!


Registered owners of property who pay their annual Immovable Property Tax 2013 to the Inland Revenue Department before the 15th October 2013 will receive a 10% discount.

The revised law, which was introduced in May, is designed to achieve one of the bailout conditions that Cyprus agreed with its international lenders, i.e. to ensure that a further €75 million is collected by the state from property taxationCurrently, it is the responsibility of each owner to self-declare the property registered in their name and its 1980 value annually to the Inland Revenue Department. But in 2014 a new system should be in place that will send out tax demands to more than 300,000 individuals and companies that are liable for this tax.

How much Immovable Property Tax (IPT) will I pay?

The amount of tax you pay will be calculated by an Inland Revenue officer and will be based on the 1980 value of all the properties registered in your name as shown on their Title Deeds – or more correctly the ‘Certificate of Registration of Immovable Property’ – in Greek ‘Πιστοποιητικ? Εγγραφ?ς Ακ?νητης Ιδιοκτησ?ας’.

 

For example if a property is registered in a single name and

has a 1980 value of €170,000, its owner will be asked to pay:

On the first €40,000 – 0.6% = €240

On the next €80,000 – 0.8% = €640

On the remaining €50,000 – 0.9% = €450

Total IPT payable = €1,330

 

If the same property is registered jointly (e.g. between a husband and wife) each of their IPT liability will be calculated on half the 1980 value – €85,000 – and each will be asked to pay:

On the first €40,000 – 0.6% = €240

On the remaining €45,000 – 0.8% = €360

Total IPT payable by each joint owner – €600

I visited the Inland Revenue Office in Limassol on Friday, completed the necessary forms and paid the tax due. Here’s what you need to do:

 

Permanent residents

Permanent residents should visit their local Inland Revenue office, taking with them:

The Title Deeds for all the properties registered in their name – Form No. 131A – earlier version 131. (Note that clear photocopies may be acceptable).

Their ‘Yellow Slip’ – Certificate of Registration – Form No. MEU1.

A completed Form 303.

In some cases a completed Form 302 may be required.

Their current passport.

 

Non residents

The registered owners of property who are not resident in Cyprus and who are unable to visit their local Inland Revenue office should appoint a representative on the island to deal with this matter on their behalf.

They should provide their representative with:

Their permanent address and other contact details.

A copy of their passport.

A copy of the Title Deed for each property registered in their name.

 

Carrot and stick.

Those who pay their IPT by 31st August 15th October will enjoy a 10% discount, while those who delay paying until after the 30th September 15th November will face a penalty of 10% on the tax they owe.

 

IMMOVABLE PROPERTY TAX

The Inland Revenue Department wishes to announce that the immovable property tax for 2013 is due for payment until the 15th of November this year.

All companies, organizations or individuals, residing in Cyprus or abroad, who had immovable property registered in their name in Cyprus as on 1/1/2013, are obliged to file a Declaration (IR 303) and pay the resulting Immovable Property Tax (IPT).

The IPT can be paid either by submitting your own declaration (IR303), which is available at the web page http://www.mof.gov.cy/ird, or by presenting the tax bill that will be issued and posted in the next two months.

The Inland Revenue is currently in the process of making the option of electronic payment possible. An announcement will be made in due course.

The Inland Revenue Department would like to bring to your attention that if the IPT is paid by the 15/10/2013 a discount of 10% on the tax paid will be allowed.

Any IPT paid after 15/11/2013 will have a 10% penalty plus interest and any other administrative charges imposed by the law.

For further information please refer to the immovable property tax section at the district Inland Revenue offices where your tax file is kept.


 

The new bands and rates that apply are as follows:

Immovable Property value based on 1.1.1980 prices

Tax Rate

Tax

Cumulative Tax

€1 -

€40,000

0.6%

€240*

€240

€40,001 -

€120,000

0.8%

€640

€880

€120,001 -

€170,000

0.9%

€450

€1,330

€170,001 -

€300,000

1.1%

€1,430

€2,760

€300,001 -

€500,000

1.3%

€2,600

€5,360

€500,001 -

€800,000

1.5%

€4,500

€9,860

€800,001 -

€3,000,000

1.7%

€37,400

€47,260

€3,000,001 -

1.9%

*Minimum tax charge of €75

 

 

Example

A person who owns immovable property worth €300.000 (based on the 1 January 1980 prices) as at 1 January 2013 will have to pay a total tax of €2.760 for 2013, which is calculated as follows:

Immovable Property value based on 1.1.1980 prices

Tax Rate

Tax

€1 -

€40,000

0.6%

€240

€40,001 -

€120,000

0.8%

€640

€120,001 -

€170,000

0.9%

€450

€170,001 -

€300,000

1.1%

€1,430

Total ax

Ä2,760

 


21/06/2012 - Return of VAT on Property Purchase - Clarifications

The applicant must be a permanent resident of Cyprus at the time of applying for the VAT return.  Permanent resident means to live in Cyprus for 365 days for the last 2 years of his application. 

The Sale Agreement is signed with 17% VAT. A provision is added that in case the Purchaser is approved by the VAT Authorities he will provide the Vendor with the approval and the Vendor shall claim the difference back from the VAT (form 4B) if he has already paid it to the Authorities (VAT payable every 3 months). After the approval every other payment shall bare 5%. When the Vendor receives the return from the VAT either pays it back to the Purchaser or gives him a credit note.

For a full claim of the VAT the property must not exceed 200sq. m

If it exceeds up to 275sq.m. then the claim will be for the first 200sq.m

Properties more than 275sq.m have no right of VAT claim

In case of an under construction property the water and electricity bills must be sent to the VAT within 6 months after the delivery of the property to the Purchaser.


 

02/06/2012 - Extension to government incentives for no transfer fees and lower VAT

The Cyprus government have now extended the two incentives shown below until the end of 2012 - 31st Demeber.  This now means that you may be able to take advantage of the reduced VAT (from 17% to 5%) on new build properties and no transfer fees to pay.  Please see full details in the articles below.


17/12/2011 - Cyprus government abolishes property transfer fees or reduces in other cases

This applies for 6 months from 02/12/2011

  • No Title Deed Transfer Fees will be paid for a property where VAT has been paid.  This applies to all real estate including residential, commercial premises etc. The purchase must take place and sales contracts deposited with the Land Registry office within the 6 month window.

  • For properties where no VAT has been charged, the original Transfer Fee has been reduced by 50% even if there are no Title Deeds issued as yet.  However, the purchase must take place within the 6 month window, the sales contracts deposited with the Land Registry office within this period and this only applies if it is the first time the property is to be resold.


11.11.2011 - VAT reduced for the purchase of first property

The Cypriot Government has introduced a reduced rate of VAT 5% (previously 15%) on the purchase of a new build property in Cyprus. This incentive is available for 6 months from December 2011.

Who is eligible?

  • You must be 18 years and over

  • A citizen of the Republic of Cyprus or an EU member state

  • Have permanent residency in the Republic of Cyprus

  • The property will be your main residence

Which properties does the reduced VAT rate apply to?

  • New build properties where the application for the building permit was deposited after 01/05/2004

  • Total covered area must not exceed 275m2. Please note however that this applies to the first 200m2 and allowances are made for families with up to 4 children. 15m2 is allowed per child (up to 75m2).

  • The square meters applies to all covered areas (ie covered veranda, basement areas, garage etc).

Please also note the purchaser cannot resell the property for 10 years and if this occurs you will be required to refund the part of the VAT.