CHANGES to Cyprus’ Property Transfer Fees, which came into effect in December 2011 for a period of six months and subsequently extended for a further period of six months, may now been extended until the 31st December 2013.
The incentives only apply to the first sale of a property, where the contract is dated and deposited at the Land Registry by the end of 2013. Specifically:
- For those who pay VAT on their house purchase, Property Transfer Fees are waived.
- For those who do not pay VAT on their purchase, Property Transfer Fees are reduced by 50%.
Property Transfer Fees become payable at the legal completion of a sale and enable the ownership of a property to be transferred from the vendor to the purchaser by the Land Registry.
These tax incentives are designed to boost property sales and stimulate growth in the Cyprus property market by reducing the cost of home ownership.
The incentives do not apply to sale agreements dated prior to 2 December 2011.
The incentives apply regardless of the when the Title Deeds are issued and ownership is transferred to the buyer – be it 5, 10 or 20 years in the future, providing the contract of sale is signed, dated and deposited at the Land Registry before 31st December 2013.
There are provisions in the law that prevent its abuse, for example, by buyers withdrawing contracts of sale deposited at the Land Registry for Specific Performance, changing their dates and then re-depositing them.