Cyprus 🇨🇾
Enjoy favorable tax conditions while investing in Mediterranean properties.
Featured Properties
Limassol
Nicosia
Strovolos
Overview
Enjoy favorable tax conditions while investing in Mediterranean properties.
Laws & Regulations
- Non-residents can purchase one property without restrictions
- No inheritance tax
- Low property tax rates
Investment Programs
- Citizenship by investment program (minimum €2.5 million)
- Permanent residency through property investment
Resident
stamp Duty
Stamp duty is payable on property purchase. The tax is calculated based on the purchase price or market value, whichever is higher.
Rates:
- First €150,000: 0.15%
- Above €150,000: 0.20%
capital Gains Tax
Capital gains tax is applied on the sale of property.
Rates:
- Standard rate: 20%
rental Income Tax
Tax on rental income, with allowable expenses deductible. Annual tax declaration required.
Rates:
- All rental income: 20%
property Tax
As of 2017, the annual property tax has been abolished. Previously, it was progressive with a maximum rate of 0.6%.
Rates:
Abolished
Non-Resident
stamp Duty
Non-residents pay the same stamp duty as residents.
Additional Rate: None
capital Gains Tax
Non-residents are also subject to capital gains tax on property sales.
Rates: 20% on capital gains
Reporting Period: Within 30 days of the sale
rental Income Tax
Non-residents pay tax on rental income with the possibility of expense deductions.
Rates: 20% on rental income
Additional Requirements: Annual tax declaration
property Tax
Property tax has been abolished for non-residents as well since 2017.
Rates: Abolished
Mortgage conditions in Cyprus:
Average Rates:
2 Year Fixed: 2.5%
5 Year Fixed: 3.5%
Deposit:
20% to 30% for residents, 30% to 40% for non-residents
Title Issues
It's crucial to verify property ownership and check for any debts on the property. Failure to do so may result in loss of invested funds.
Estimated Cost: Varies, additional legal fees may apply
Hidden Defects
Property checks may reveal hidden debts or legal encumbrances, requiring additional legal services.
Inspection Cost: Varies, typically €500 - €1,000
Squatter issues can arise, especially for non-resident property owners. Legal proceedings can take 6 months to 2 years.
Estimated Legal Costs: €5,000 - €10,000
Resident
interest Rates
Interest rates for Cyprus tax residents range from 3% to 4.5% per annum. Rates may vary depending on market conditions and the borrower's credit profile.
Range: 3% to 4.5%
Source: Central Bank of Cyprus - Interest Rates
down Payment
Minimum down payment for residents ranges from 20% to 30% of the property value. Banks may offer financing up to 80%, but this often requires additional guarantees.
Range: 20% to 30%
Source: Bank of Cyprus - Mortgage Options
mortgage Term
Standard mortgage term for residents is 15 to 30 years. Longer-term mortgages can reduce monthly payments but increase the total amount paid due to interest.
Range: 15 to 30 years
Source: Hellenic Bank - Mortgage Loans
documentation
Required documents include proof of income, tax returns, and credit history reports. Incorrect or incomplete documentation may lead to loan rejection.
Source: Cyprealty - Mortgage Process
casestudy
In 2021, a resident faced issues due to incorrect property valuation, resulting in mortgage rejection and a loss of €6,000 in preliminary payments. This highlights the need for thorough preparation and professional property valuation.
Source: Cyprus Property News - Common Mistakes in Mortgage Applications
Non-Resident
interest Rates
Non-residents can expect higher mortgage interest rates, ranging from 4% to 5.5% per annum. This is due to increased risks for banks when lending to non-residents.
Range: 4% to 5.5%
Source: Cyprus Popular Bank - Non-Resident Mortgages
down Payment
Down payment for non-residents typically ranges from 30% to 40% of the property value. Some banks may only finance up to 60%, significantly increasing initial costs for borrowers.
Range: 30% to 40%
Source: Alpha Bank Cyprus - Mortgage Loans for Non-Residents
taxation
Non-residents should be aware that when selling property, they are required to pay capital gains tax, which is 20% on capital gains. It's also necessary to consider tax obligations in their country of residence.
Source: Tax Department of Cyprus - Capital Gains Tax
mortgage Term
Mortgage term for non-residents typically ranges from 10 to 25 years. Shorter terms can help reduce total payments but require higher monthly installments.
Range: 10 to 25 years
Source: Universal Bank - Mortgages for Foreigners
casestudy
In 2022, a non-resident faced issues due to incorrectly prepared documents, leading to a delay in the mortgage process costing €8,000 and additional legal fees. This emphasizes the importance of professional assistance when applying for a mortgage.
Source: Cyprus Mail - Issues with Mortgages for Foreign Buyers
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