Cyprus lost favour a bit with Brits when its economy hit rock bottom in 2012 and 2013, but now could be the time to look again at Aphrodite’s Isle. Changes to property taxes should make conditions there highly favourable to home buyers…
Article written by The Overseas Guides Company
Buying a home in Cyprus is set to get cheaper and easier in 2015, thanks to new regulations being introduced by the government there.
Transfer tax – similar to Stamp Duty in the UK and paid when title deeds are transferred into the new owner’s name – is to be reduced by 50 per cent on all property purchases that take place before the end of 2016, thanks to a new ruling coming into effect in Cyprus. Transfer tax is levied on all resale purchases on a sliding scale of 3-8 per cent, depending on the value of the property.
And things get better! Cypriot property purchased before the end of 2016 will no longer be subject to Capital Gains Tax (CGT) when the owner comes to sell at some point in the future. This represents a substantial saving, given that CGT is typically levied at 20 per cent of the gain in a property’s value.
Other proposed changes that should benefit homeowners in Cyprus include abolishing immovable property tax – the equivalent of Council Tax – and abolishing transfer fees when property is passed from parent to child, as well as the getting rid of fees payable when properties of an equal value are exchanged.
“These changes will be welcomed by both buyers and sellers of property in Cyprus,” said Elaine Ferguson, Head of the Resource Centre at Overseasguidescompany.com. “It makes property cheaper for British buyers, which should stimulate sales and help vendors to find a buyer more quickly. And on one level, having lower completion costs makes Cyprus more attractive than other second home destinations.”
Meanwhile, anyone wavering about buying in Cyprus due to delays in receiving title deeds will feel reassured by recent developments. Cyprus has been informed by the Troika (the European Union, European Central Bank and International Monetary Fund) that laws must be passed to ensure that title deeds are passed directly on to buyers immediately after they have paid for their properties. This must be enacted before 5th September, so that Cyprus will receive the next instalment of €500 million from the Troika on 20th September.
To this end, the Council of Ministers has approved the law and it has been proclaimed by the Minister of the Interior, Mr Hasikos, that an extraordinary meeting of the Cyprus Parliament will start on 3rd September to pass the law. This is a huge step forward for the Cyprus property market as it finally resolves the title deeds problem in favour of the buyers – and should make completing on a property there easier.
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