Comparison of taxes when purchasing real estate in Cyprus for residents and non-residents. Learn about transfer fees, VAT, and legal costs before buying.
Comparison of Taxes When Purchasing Real Estate for Residents and Non-Residents
Buying a home in Cyprus is attractive for many reasons — the weather, the sea, the pace of life. But one thing that often gets overlooked until the last moment? Taxes. And if you’re a non-resident, the tax situation looks a bit different than it does for someone living full-time on the island.
So how much do you really pay? And does it matter if you’re local or not?
Let’s walk through it.
Do Residents and Non-Residents Pay the Same Taxes?
In short — not always. While the basic property purchase tax structure in Cyprus is the same for everyone, some fees and procedures work slightly differently depending on your residency status.
If you’re buying property in Cyprus as a local resident (with a valid residence permit or citizenship), your interaction with the system tends to be more straightforward. You’ll already have a local tax ID, a Cypriot bank account, and possibly access to government discounts or exemptions — especially for first-time buyers.
For non-residents, it’s not necessarily more expensive — but it can be more paperwork.
Transfer Fees
One of the major costs when buying a home in Cyprus is the transfer fee, charged by the Land Registry Office. This is calculated based on the property’s value, and the rate is the same whether you’re a resident or not:
- 3% on the first €85,000
- 5% on the next €85,000
- 8% on anything above that
However, new properties subject to VAT (19%) are exempt from transfer fees entirely — a bonus that applies to everyone, regardless of nationality.
VAT: Only for New Builds
If you’re buying a brand-new property, you’ll likely pay 19% VAT instead of transfer fees. There is a reduced 5% VAT rate for eligible buyers using the property as their main residence, but this often requires residency or at least a valid pink slip Cyprus (temporary residence permit).
This means non-residents might end up paying full VAT unless they go through the proper application process — something your lawyer or agent should guide you through.
Legal and Administrative Costs
These don’t change much between residents and non-residents, but non-residents should budget extra for things like:
- Translators or bilingual legal advice
- Additional bank or transfer fees (especially if funds come from outside the EU)
- Power of attorney, if you’re buying remotely
If you’re considering buying property in Cyprus after Brexit, you may also face extra ID verification steps, especially if you’re transferring large amounts from the UK or trying to get financing locally.
What If You’re Buying for Citizenship?
That’s a different ballgame. Although Cyprus suspended its fast-track investment citizenship program, there are still ways to apply for residency — and potentially citizenship over time — through property ownership.
If you’re buying property in Cyprus to have a citizenship or for long-term residence, the taxes remain mostly the same, but you’ll need to meet certain conditions:
- Minimum property value
- Clear title deeds
- Clean criminal record
- Proof of income or financial independence
In these cases, it’s critical to work with a legal team that understands buying property in Cyprus with citizenship pathways. Reputable platforms like MySpace often connect buyers with trusted professionals who’ve handled these cases before.
And if you want to explore the broader market — from rentals to commercial property — their main site offers plenty of resources: https://myspace.com.cy
FAQs
1. Do non-residents pay more taxes when buying property?
Non-residents in Cyprus might not always pay more. But, they could face extra paperwork. Transfer fees and VAT are the same for everyone.
2. What is the property transfer fee in Cyprus?
The transfer fee depends on the property’s value. It’s 3% on the first €85,000, 5% on the next €85,000, and 8% after that. This rule applies to both residents and non-residents. New builds are exempt from VAT.
3. Can non-residents get reduced VAT on property?
Yes, but they need to apply with proof of residency or a pink slip. Without it, they pay the full 19% VAT. A lawyer can help with the application.
4. What extra costs do non-residents face in Cyprus?
Non-residents might need translators or extra bank fees. They might also need power of attorney if buying from afar. Post-Brexit, UK buyers face stricter ID checks. These costs are in addition to regular property taxes.
5. Does buying property in Cyprus lead to citizenship?
Buying property no longer directly leads to citizenship. But, there are residency options. Over time, residency could lead to citizenship if certain conditions are met. Getting legal advice is very important for these cases.
