Transfer fees in Cyprus
Transfer fees in Cyprus are charges levied by the Land Registry for the legal transfer of property ownership from the seller to the buyer.
The amount depends on the price of the property in Cyprus and on each buyer's share. It changes for VAT sales and for transfers within the family.
The relevant law in Cyprus is the Department of Lands and Surveys (Fees and Charges) Law, Cap. 219.
When the DLS values the property
The fee is charged in bands on the sale price. If the DLS Director is not satisfied that the declared price reflects the market value, he can charge the fee on the market value. A buyer who disagrees still pays the fee as first assessed and reserves his rights at once. Within 45 days of the DLS accepting the declaration of transfer, he can send the Director written representations, with his own valuer's report if he has one.
After an objection, or where the Director decides a further valuation is needed, he values the property within three months of the declaration of transfer. He sends the result and the fee due by registered letter. The buyer can challenge that fee in court. A refund or an extra payment is due within two months of the decision. An appeal does not delay payment of any balance.
The rates are as follows
Transfer fees for one buyer: the Department of Lands and Surveys (DLS) charges the fee in bands on the sale price. If the DLS Director is not satisfied that the declared price reflects the market value at the date of the declaration of transfer, or at the contract date he accepts, he can charge the fee on the market value. The legal scale is 3%, 5% and 8%. A 50% reduction brings it down to these rates:
- Up to €85,000: 1.5%
- From €85,001 to €170,000: 2.5%
- From €170,001: 4%
The fees for each band are added up. A €300,000 home pays €1,275 + €2,125 + €5,200 = €8,600. The DLS online calculator shows the fee before the 50% reduction, €17,200 for the same price.
Transfer fees for joint purchases: the fee is worked out on each buyer's share, and each share goes through the bands on its own. Two buyers with equal halves each pay the scale on half the price, so for the whole price the bands become:
- Up to €170,000: 1.5%
- From €170,001 to €340,000: 2.5%
- From €340,001: 4%
For the same €300,000 home bought in equal halves, the fee is €5,800. Other shares give other figures.
Exemptions and allowances
It is possible to reduce transfer fees by taking advantage of certain exemptions and allowances.
50% reduction
The DLS reduces the transfer fee by 50% in all cases where the fee is charged on the scale in Chapter 17 of the Schedule to Cap. 219. The rates above already include this reduction. The DLS calculator does not apply it, so halve the figure it gives. One exception: a transfer of property acquired through a sale procedure under Parts VI and VIA of the Transfer and Mortgage Law No. 9/1965 pays the full scale.
No transfer fee on a sale with VAT
No transfer fee is charged when VAT is charged on the same transaction for the same property. This needs a certificate from the VAT Department. If the DLS Director is not satisfied that the declared price on which VAT was charged reflects the market value at the date the sale was agreed, he may charge the fee on the market value, less the fee that would apply to the declared price.
Read more about other property taxes in Cyprus.
Transfers within the family
- A gift or sale from parents to children carries no transfer fee.
- A gift between spouses, or between relatives up to the third degree of kinship, costs 0.01% of the property's value at 1 January 2013 prices. A sale between spouses or other relatives pays the scale above, with the 50% reduction.
Takeaway
Transfer fees are paid to transfer and record property ownership. When acquiring a property in Cyprus, a buyer should factor in the transfer fees as part of the overall cost.
The fee does not depend on whether the buyer has bought property in Cyprus before. The 50% reduction applies to every transfer charged on the scale, except a transfer of property acquired through a sale procedure under Parts VI and VIA of Law No. 9/1965. A sale in such a procedure pays no fee when the total proceeds per owner are €350,000 or less. The same rule covers sales in bankruptcy and company liquidation.