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Cyprus Amends Taxation of Immovable Property

Cyprus-amends-taxation-of-immovable-propertyCyprus amended its tax legislation with respect to the immovable property tax rates at the end of the August 2015. Under the new legislation, owners of real estate properties will be taxed according to a new and well-defined scheme based on the value of the property. Our Cypriot lawyers can provide you with additional information about the country’s taxation system.

The new valuation system for the Cypriot taxation of immovable property

Cyprus has started to impose a tax on immovable property in 1980. The tax is paid according to a self-assessment scheme and applies to both Cypriot and foreign citizens. Also, both natural persons and legal entities are required to pay the Cypriot property tax and the estate duty. At the end of the summer, the Cypriot tax authorities have issued new rates under which the property tax will be calculated. These rates are:

  • -          0.6% if the value of the property is 40,000 euros maximum,
  • -          0.8% if the value of the property is between 40,001 and 120,000 euros,
  • -          0.9% if the value of the property is between 120,001 and 170,000 euros,
  • -          1.1% if the value of the property ranges between 170,001 and 300,000 euros,
  • -          1.3% if the value of the property ranges between 300,001 and 500,000 euros,
  • -          1.5% if the value of the property is between 500,001 and 800,000 euros,
  • -          1.7% if the value of the property is between 800,001 and 3 million euros,
  • -          1.9% if the value of the property exceeds 3 million euros.

Owners of Cypriot properties worth below 12.500 euros are exempt from paying the tax.

Who will pay the new property tax in Cyprus?

Cypriot tax residents and non-tax residents are required to pay the property tax if:

  • -          the Cypriot property was registered on their names at the 1st of January 2015,
  • -          they bought the property which was not registered under their name at the 1st of January 2015,
  • -          the property is subject to a lease agreement registered at the Cypriot Department of Lands and Surveys.

The tax must be paid by the 31st of December 2015. However, those who pay the tax by the 1st of December will also benefit from significant discounts ranging between 17.5% and 20%.

The law was published in the Official Gazette at the end of September. For further details about acquiring a property, please feel free to contact our law firm in Cyprus.

 

 

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