Essential Guide to Selling Property in Cyprus: Costs, Tips, and Common Pitfalls

Guide to Selling Property in Cyprus – Selling immovable property in Cyprus is a rewarding opportunity, given the dynamic real estate market. Whether it’s a holiday home, a family residence, or an investment property, understanding the local processes, legal requirements, and associated costs is crucial for a smooth transaction.

Key Considerations for Sellers:

• Avoid Common Pitfalls: Lack of awareness about the costs involved can lead to stress, delays, unexpected expenses, and lower profits.
• Maximize Profit: Knowing all the costs upfront helps sellers plan better and accurately calculate net proceeds.
• Protect Interests: Working with experienced legal professionals safeguards sellers’ interests throughout the sale.
• Mitigate Risks: Understanding the legal and procedural requirements minimizes the risk of costly mistakes.
• Avoid Surprises: Awareness of potential expenses prevents unexpected costs from derailing the sale.

Main Costs in Selling Property:

• Estate Agent Fees: Typically 3% to 5% of the sale price, covering marketing, viewings, and negotiations.
• Legal Fees: Ranging from 1% to 1.5% of the property’s value, covering contract drafting, liaising with authorities, and finalizing the sale.
• Capital Gains Tax (CGT): 20% on the profit from the sale, with deductions for the original purchase price, indexation, and other allowable expenses.
• Personal CGT Allowances: Tax-free allowances of up to €85,000 depending on the seller’s circumstances.
• 0.4% Levy: A new tax on the sale price, introduced in November 2022, to compensate Greek-Cypriot refugees.
• Other Expenses: Costs related to providing necessary documents, paying off debts or mortgages, and settling outstanding bills.

Additional Considerations:

• Immovable Property Tax: While abolished in 2017, sellers may still be liable for unpaid IPT from 2014 to 2016.
• GESY and Defence Tax: Sellers who earned rental income and didn’t declare it must file tax assessments and pay these taxes.

Conclusion:

Understanding the costs and processes involved in selling property in Cyprus is essential for avoiding mistakes and ensuring a profitable transaction. Engaging professionals early in the process and seeking legal advice tailored to your situation will help navigate potential challenges and facilitate a smooth sale.

Article Credits go to Maria Kokoridi