Guide to Taxes For Property Transactions
There are three main taxes involved in a cyprus property sale. These taxes are:
- The transfer fee which is payable to the Land Registry Office.
- The VAT (KDV) which is payable to the Tax Office or to the vendor.
- The Stamp Duty which is payable to the Tax Office.
All north cyprus property is subject to VAT payments at some stage, and payment eligibility depends on two factors:
VAT is payable on all new build properties in north cyprus. When transferring to an individual VAT is only payable once. This only alters when transferring a property into a company name whereby VAT is chargeable on each transfer. If you are purchasing a re-sale villa which is in a private individuals name (rather than a building company) and aim to transfer it to your own name it is highly unlikely that VAT will be applicable.
The percentages levied for each of the three types of tax are shown below:
The transfer fee is 6%. However, every person has a once in a lifetime option to reduce this to 3%. The transfer fee payable on all future purchases by that person will be 6%. This tax payable on the day of title transfer.
VAT for Property Transactions
VAT is payable at 5% of the sale price or the assessed value of the T.R.N.C land registry. VAT is payable on possession/completion of a new build property in north cyprus often before transfer takes place.
This is 0.5% of the contract price provided this is paid within 1 month of the date of the contract. If it is not paid within this time, the rate increases in stages until after 6 months it becomes 1.5%.