Cyprus property taxes in 2018

Cyprus property taxes in 2018

A number of changes to Cyprus property taxes have been made in recent times, most notably the introduction of VAT on the sale of building land, which I have summarized together with other changes in this article.

Filed Under RECENT changes to property taxes in Cyprus include the imposition of VAT on the sale of undeveloped building land intended for the construction of building(s) and changes to the VAT payable on the acquisition/construction of a property to be used as the purchaser’s primary and permanent residence.

Here is a summary of the property-related taxes that apply as we enter 2018.

Property Taxes payable to Communities and Municipalities This ‘local’ property taxes payable to Communities and Municipalities is calculated on the Land Registry’s assessment of the 2013 value of the property. Property Transfer Fees

(a) No Property Transfer Fees are payable If VAT was paid on the purchase price of the property.

(b) Property Transfer Fees are reduced by 50% if VAT was not paid on the purchase price of the property. However if the Director of the Land Registry considers that the price stated on the contract of sale does not reflect the market value of the property at its date of purchase he may, at his discretion, charge the full Property Transfer Fees based on the Land Registry’s assessment of the market value of the property at its date of sale less the price stated on the contract of sale. (The Department of Lands and Surveys has an on-line Transfer Fees Calculator .)

Capital Gains Tax Capital Gains Tax is payable at 20% on gains resulting from the disposal of a property. The acquisition cost is adjusted for inflation by reference to the cost of living index. (If the property was acquired before 1980, the 1980 value shown on the property’s Title Deed is used as the acquisition cost.) Expenses related to the acquisition and disposal of a property may also be deducted, subject to certain conditions e.g. interest costs on related loans, transfer fees, legal expenses etc. Further allowances are granted for ‘allowable expenses’ such as accepted capital additions and improvements to the property – planning permission where necessary. Note that subject to conditions, immovable property acquired between 16th July 2015 and 31st December 2016 inclusive will be exempt from CGT at its disposal at a future date.

Value Added Tax VAT is charged at the rate of 19% on the first purchase of a property. VAT is also charged at the rate of 19% on the sale of undeveloped building land intended for the construction of building(s) in the course of carrying out a business activity. A reduced VAT rate of 5% is applied on the first 200 sqm. of the acquisition/construction of a property to be used as the purchaser’s primary and permanent residence for a period of ten years. VAT is imposed at the standard rate (19%) on the remaining square metres. VAT is not charged on resale properties or on land in protected zones and farming land.

Stamp Duty Stamp duty is calculated on the value of the purchase agreement and remains unchanged at the rate of: €0 to €5,000 – zero

€5,001 to €170,000 – 0.15%

Greater than €170,000 – 0.2%* *

Capped at a maximum of €20,000

Copyright © Cyprus Property News

Parliament approves VAT on building land

Parliament approves VAT on building land The new bill imposing VAT on building land has been approved by parliament and will come into force on 2nd January 2018 some ten years after the deadline set by the European Union. By: George Psyllides Published: Sunday 5th November 2017 • Filed Under PARLIAMENT on Friday approved a bill imposing 19 per cent VAT on the sale of building land, fulfilling an EU condition some 10 years after the original deadline. The bill passed with the votes of 26 MPs from DISY, DIKO, Solidarity, and the Green Party. Eighteen MPs from AKEL, EDEK, ELAM, and one MP each from DIKO and Solidarity, voted against. The law in question should have been passed by January 1, 2008, and delays prompted the EU Commission to warn Cyprus repeatedly with stiff fines. The new law will come into force on January 2, 2018. House finance committee chairman, DISY leader Averof Neophytou said VAT can be recouped and will only be imposed in cases where the land is sold by a company or businessman registered with the VAT service. Neophytou said the new arrangement could create some short- or medium-term liquidity problems. He reminded parliament that Cyprus has already received a second official warning from the European Commission over the delay in passing the bill. Some MPs voiced concern over the way the law would be applied by the tax commissioner who has the power to decide whether a transaction is commercial or not. Main opposition AKEL warned about the possibility of newly-weds having to pay the tax when buying a plot to build their home. AKEL MP Giorgos Loukaides said there was nothing in the bill ensuring it would not happen. “We have not in any way ensured that new couples will be exempted from paying tax on their first house,” Loukaides said. The land falls under the category of undeveloped building land will be determined by regulations passed by parliament. Protected zones and farming land will be exempted. VAT will be imposed on all sales of building plots taking place as part of economic activity. According to the tax commissioner, any other cases will be examined individually.

Copyright © Cyprus Property News

Cyprus the safest country in the world for young people

Cyprus the safest country in the world for young people

Taken from the Cyprus Mail 23/08/17

Cyprus the safest country in the world for young people

Cyprus is the safest country in the world for young people out of 184 countries across the globe, according to the latest data published by the World Health Organisation (WHO) it emerged on Tuesday.

Analysing the data, British newspaper The Guardian found that Cyprus topped the charts compared to countries from other continents with a death rate of almost one in every 4,762 youths. A young person was defined as aged between 15 and 29.

On the other side of the scale, Sierra Leone proved to be the most dangerous with one youth in every 150, estimated to have died in 2015, the paper reported.

The figures show a widening gap in youth mortality between the developed and developing world as nine of the 10 most dangerous countries are in Africa, the Guardian said citing WHO data.

Cyprus topped the list with 21 deaths for every 100,000 youths, followed by Luxembourg which had 22, Spain with 25 and Denmark along with Malta with 26.

The UK and Japan had 33 young deaths for every 100,000 youths while Greece had 45.

Sierra Leone, Syria and Ivory Coast are the most dangerous for young people according to the 2015 figures which indicate 671, 579 and 574 young people die every 100,000 youths.

The most common cause of death in the figures was due to road accidents and according to WHO estimates, 350,000 young people died in 2015 as a result of traffic related injuries.

Entire Paphos coastline wins quality award for second consecutive year

Coastline in PaphosCoastline

Taken from the Cyprus mail 14th July 2017

PAPHOS has won a Gold Quality Award as a top Sustainable Coastal Tourist Destination for 2017, the second consecutive year it has held the title.

This is the third time that the entire coastal area including, Yeroskipou, Paphos, Kissonerga, Chlorakas, Peyia, Polis Chrysochous and Neo Chorio has achieved Quality Coast status, the first win was in 2013.

“Following the recent award of 17 Blue Flags across the district, Paphos has now been honoured and managed to win the Gold Quality Award as a Sustainable Coastal Tourism Destination for 2017,” Nasos Hadjigeorgiou, the head of the Paphos regional board of tourism, told the Cyprus Mail.

Three new beaches in the Paphos district were awarded blue flags this year; Neo Chorio, Peyia and Yeroskipou.

Hadjigeorgiou said that the achievement has been a concerted effort of the bodies involved.

The prestigious award is given out to holiday destinations that best maintain their local identity, natural and cultural heritage, scenic beauty, and a clean environment. Quality Coast Awards will be presented to winning destinations.

“The distinction has been made possible by the cooperation of all of the Paphos municipalities and communities of the region, under the coordination of the Paphos regional board of tourism who also made the submission made for the region,” he said.

Hadjigeorgiou said that the awards recognise areas that they are clean and safe with great facilities.

The tourism head said that the entire coastline of Paphos has been recognised as most attractive for visitors who want to combine holidays with an enjoyment of nature at a destination with enchanting scenery that cares for and preserves the quality of the environment and practices to protect and enhance the local identity and cultural heritage.

Quality Coast is the largest international certification programme for sustainable tourism destinations.
Since 2007, more than 125 tourist destinations in 23 countries have been selected for awards, including coastal towns, resorts and islands. As from 2013, destinations from all the world can apply for a Quality Coast Award, giving it even more global recognition.

Hadjigeorgiou said that the district of Paphos is already well known all over the world for its beautiful nature, clean beaches and crystal-clear waters. He noted that the Gold Award will give more kudos and ensure that the districts’ international reputation will continue to grow.

“Paphos has maintained its place a top destination for those wanting to experience areas of unparalleled natural beauty, picturesque beaches and rich and rare vegetation as is found in much of Polis Chrysochous and Neo Chorio.”

The main criteria for the selection of areas are water cleanliness, biodiversity of areas, environment, active good environmental behaviour, such as the saving of natural resources, socio-economic status, cultural heritage, lack of air pollution, noise levels, quality of tourism infrastructure, security, accessibility, easy access to information, and so on.

He said: “We would like to thank the municipalities of Paphos, Geroskipou, Peyia and Polis Chrysochous, the community councils of Chlorakas, Kissonerga and Neo Chorio, as well as PASYXE Paphos, for this well-deserved outcome.”

Latchi Marina Harbor Polis Paphos

Latchi MarinaLatchi Marina

A bit about Latchi

Latchi is a sleepy port of Cyprus, where the fishermen still bring in the fresh catch of the morning and supply those who are lucky enough to have got up early that day.

In the past few years due to it’s ever growing facilities and amenities, Latchi Harbour and Marina has become a favorite stopping point after the Greek Isles and Turkey.

Tavernas litter the quayside offering the local speciality Fish Meze and still at a very good price, unlike the other harbours around the island.
Polis is the closet town, situated just 2km away from the harbour and with 2 large supermarkets and various other shops and restaurants. Not leaving the harbour? Then don’t worry, there are several kiosks and mini supermarkets where you can buy all essential products. For more

Growing Olive Trees 2nd March 2017

Growing Olive Trees Care and FeedingGrowing Olive trees

Olive trees require a well-drained soil and a sunny position. Avoid sites where water stands during rainy periods or where ground water seeps into a hole. Do not, however, confuse the olive for a desert plant. It needs regular watering to thrive. Insufficient water will cause your tree to suffer, and even die if left too dry for too long. Continue Reading

Recovering real estate market sign of hope for banks, Moody’s says

By Stelios Orphanides  Reference Cyprus Mail

Moody’s Investors Service said that the recovery of property prices, reported by the Central Bank of Cyprus a week ago, would improve the asset quality of Cypriot banks, which is a “credit positive”.

“Recovering property prices would support the construction industry, incentivise mortgage repayments from strategic defaulters who have the capacity but are unwilling to repay and allow banks to offload real estate taken on their balance sheet through debt-to-asset swaps,” Moody’s said on Monday in an emailed statement.

The three largest Cypriot banks, Bank of Cyprus, Cooperative Central Bank, Hellenic Bank “will benefit from an improved real estate market,” Moody’s said adding that Bank of Cyprus with 33 per cent of market share in residential mortgages, accounting for 21 per cent of its gross loans, and the Co-op would “have the most to gain”.

Through loan restructurings involving debt-to-asset swaps, Cyprus’s largest lender already acquired a total of €1.3bn in real estate assets making up 6 per cent of its total assets, Moody’s said. “A gradually recovering property market would facilitate its sale of these assets and reduce the likelihood of the bank recording losses,” the rating company said.

The Cooperative Central Bank, which the government bailed out with almost €1.7bn, “will also benefit because residential mortgages amount to 37 per cent of its gross loans,” Moody’s said. Half of these loans are classified as non-performing.

The real estate market showed signs of recovery last year partly on incentives given by the government to property buyers and partly on an increase in loan restructurings involving debt-to-asset swaps. Total property transactions rose 43 per cent last year to 7,063. Residential property prices rose marginally in the third quarter of 2016 compared to the quarter before even after falling an annual 1.3 per cent, the central bank said on February 13.

Some of the incentives offered by government have meanwhile phased out. Property buyers were exempted until December from capital gains tax and could benefit from decreased transfer fees. Foreign investors, including those who buy real estate, can still benefit from two government schemes depending on the size of the investment to acquire a residence permit or Cypriot citizenship.

This is helping with the recovering real estate market

“We expect property prices to broadly stabilise over the coming quarters, and the demand for property to increase gradually from low levels,” Moody’s said. Still, the increase of domestic demand will suffer from the heavy household indebtedness, seen at 116 per cent of economic output in December.

Moody’s warned that Cypriot banks will have little prospect of seeing the quality of their loan portfolio improve any time soon. Non-performing loans, roughly half of total loans in the banking system, must first complete a 12-month probation period after they are restructured before they can be classified again as performing.

“Additionally, it has been difficult to change Cypriot households’ poor borrowing culture, as indicated by relatively high percentage of restructured retail loans that have fallen back into arrears,” Moody’s said.

Sales in Cyprus up

Sales of properties in Cyprus increased by 44% in September 2016 this follows increases of 50% in August and a 26% increase in July. The trend is positive, and with the new amendments to the Citizenship laws, we are looking towards a very positive few months.