Stamp Duty in Cyprus
Cyprus real estate agreements all need stamp duty. But what is it, and how is it calculated? We are here to help.
Key takeaways
- Stamp duty is a tax on certain legal documents, for example, real estate contracts, including contracts to sell or rent real property.
- Stamp duty applies in Cyprus. The relevant law is Stamp Duty Law 19/1963.
- You have 30 days to pay stamp duty after signing a contract or completing a document.
- Certain formalities need to be followed, explained below.
What is Stamp duty?
Stamp duty in Cyprus is a tax the government places on legal documents. The most common example is documents for the transfer of real estate. However, stamp duty applies to many others, such as wills, civil marriages, letters of credit, company documents, etc.
General rule
The general rule is that, in Cyprus, stamp duty is placed on the following:
- Written documents relating to assets located in Cyprus, and
- Matters taking place in Cyprus.
Applicable Law
The applicable law is the Stamp Duty Law (19/1963, the “law”). This law is revised often, with the latest amendments happening in 2022. Unless otherwise specified, all legislation sections mentioned in this Guide refer to the law of 19/1963.
The law contains an Appendix showing the stamp duty rates, while there are sections specifying exceptions and formalities. The Ministry of Finance Tax Department has updated some of those formalities in 2020 (see below).
Payable stamp duty
For real estate transactions, the relevant rates are based on the value specified in each contract. Contracts to buy and sell real estate come under this general rule.
Stamp duty rates
The rates are applied progressively to the parts of the value within each bracket and are as follows:
- For contracts up to €5,000, there is no stamp duty.
- For values from €5,001 to €170,000, it is 0.15%.
- For values over €170,000, stamp duty is €2 for each €1,000 or part thereof.
- The maximum stamp duty paid on any contract is €20,000.
- Contracts with no specified amount have a €35 stamp duty (with exceptions).
Example calculation
The total stamp duty for a sale of €250,000 is €407.50.
Here is the breakdown of the calculation:
- First €5,000: €0
- €5,001 to €170,000: This portion of the value is €165,000. At a rate of 0.15%, the duty is €247.50.
- Over €170,000: The remaining portion of the value is €80,000. At a rate of €2 for each €1,000, the duty is €160.00.
The sum of these amounts (€0 + €247.50 + €160.00) gives the total stamp duty of €407.50.
Contracts for rent pay stamp duty as contracts in general
The value is calculated according to these rules:
- In a contract to rent for a specified period, the value is the whole amount of the rent to be paid plus any premium (deposit).
- In a contract to rent for an unspecified period, the value is the amount of rent for a hundred years.
Specific cases and exemptions
A proxy for a single act is €2, while for any other situation (with exceptions), it is €6.
There is no stamp duty on reorganisation schemes to rebuy property that has been alienated unless the debtor has acted dishonestly (Section 4B).
Who pays stamp duty in Cyprus?
- The general rule in real estate is that the person receiving the property pays stamp duty: the buyer or tenant.
- In insurance contracts, the payer is the person insured.
- In a contract to build a structure (building or other edifice) or a contract for technical construction or project (Greek: τεχνικό έργο), the payer is the contractor.
Read more about other property taxes in Cyprus.
When and how do I pay? Formalities and timelines
According to Cyprus law, stamp duty must be paid within 30 days of signing or drafting the document.
Your lawyer or real estate agent will ordinarily carry out the relevant process for paying.
Paying depends on the type of document that needs to be stamped. This policy came into force on 29 June 2020 for documents with a fixed duty stamp amount and on 27 July 2020 for documents where the stamp duty amount depends on the contract value.
Documents with a fixed duty stamp amount
For example, a certified copy that is fixed at €2.
Attach the stamp to the document. Cancel the stamp with a double diagonal line on the stamp and draw your initials.
Documents where the amount of stamp duty depends on the value
The Tax Department provides a stamp duty calculator.
After using the calculator, what you must do depends on whether the value is more or less than €100.
Stamps up to €100
- Fill in the stamp calculation document and send it to the Tax Department.
- Buy the stamps from authorised representatives (the local offices of the Cyprus Bar Association and certain other authorised persons).
- Attach and cancel the stamps as per the instructions above.
Stamps over €100
- Print the calculation document and take it to the Tax Department for payment (0800 payment code).
- Give the relevant tax department official the payment receipt to stamp the document.
The bottom line
Stamp duty is a steady source of income for the Cyprus government. In real estate, stamp duty is central because it is needed for documents like contracts to buy, sell, or rent realty and proxies.
Provided you carry out the relevant formalities, there will be no problem with the payment. Our office is here to help you with any or all of the details.
