Cyprus-Forum.com

[Paphitis]

A relative wants to buy a proerty.

What are the new charges post Troika?

How much VAT and Trasfer Fees will he be up for?

Has anything else changed after the arrival of the thieving razor gangsters of Troika?

[bill cobbett]

Annual value based property tax.

[Paphitis]

That would be based on 1981 valuations though I would presume.

It all sounds pretty scary. My advice to him was to stay away from Cyprus.

He is adament but I advised buying in Astoria, or an apartment in Manhatten. Much less trouble and stress.

That is the problem with buying property in Cyprus or Greece. Too much uncertainty and any changes are not well publicised.

[bill cobbett]

Yes, 1980 value with a 75E minimum.

Get your friends to browse through Nigel Howarth's CY Property Site... A must read resource for buyers.

[B25]

A relative wants to buy a proerty.

What are the new charges post Troika?

How much VAT and Trasfer Fees will he be up for?

Has anything else changed after the arrival of the thieving razor gangsters of Troika?

Vat is set at 18% if he is buying a new build, not a resale.

If he intends it to be his only permanent residence he can pay only 5%.

Transfer fees are as they always were, nothing to do with Troika (IPT tax).

The TFs are staggered, 3% on 1 - 85,430, 5% on 85,431 - 170,000, 8% over the 170,000.

The TFs only if you are buying with a title ready not a contract of sale.

The Immovable property Tax is based on the 1980 value of the title and these are about to be revised.

See here:

Immovable Property Tax

This tax is payable annually at the following rates: The law has recently changed as directed by the TROIKA. These are 1.1.1980 values

- Property valued up to E 40,000 - 0.6%
- Property valued from E 40,001 - E 120,000 - 0.8%
- Property valued from E 120,001 - E 170,000 - 0.9%
- Property valued from E 170,001 - E 300,000 - 1.10%
- Property valued from E 300,001 - E 500,000 - 1.30%
- Property valued from E 500,001 - E 800,000 - 1.50%
- Property valued from E 800,001 - E 3,000,000 - 1.70%
- Property valued from E 3,000,001 - upwards - 1.90%

This can be significantly reduced if there is more than one name on the Contract of Sale.

Hope that helps. Buying in Cyprus is not a problem if you know what you are doing.

Good Luck

[Paphitis]

Thanks B25!

That was exactly what I was after.

I will tell him to buy a resale and not a new bult. 18% would be an expense he could do without as is the case for many of us.

Transfer Fees seem normal but it will be interesting to see what happens with the revaluations.

B25, do you work in real estate?

I've given him a couple of contacts, another would not go astray!

Send me a PM if you like...

[GreekIslandGirl]

It's nonsensical to tell "him" not to buy new just to avoid VAT because buying resale might be more expensive even without VAT. In the end, you have to buy the house you want which you can afford. If you cannot afford to buy, then don't. If you want to play games and speculate then you need to know a lot more than you do so what's the point of advising "him" not to buy in Cyprus if you claim to not know much about buying property in Cyprus in the first place?

[supporttheunderdog]

It's nonsensical to tell "him" not to buy new just to avoid VAT because buying resale might be more expensive even without VAT. In the end, you have to buy the house you want which you can afford. If you cannot afford to buy, then don't. If you want to play games and speculate then you need to know a lot more than you do so what's the point of advising "him" not to buy in Cyprus if you claim to not know much about buying property in Cyprus in the first place?

Buying resale means that 18% does not go to the government. More chance of getting more space for the same total cost. It might also reduce the risks of dealings with some of the less scrupulous property developers who have developers loans out which they will not lift but where the buyer ends up getting shafted by the bank if /when the developer defaults. With the Troika enforcing new rules on the *ankers about non performing loans that could be important as a lot more loans will be declared duff and the banks will enforce against the collateral.

[Paphitis]

It's nonsensical to tell "him" not to buy new just to avoid VAT because buying resale might be more expensive even without VAT. In the end, you have to buy the house you want which you can afford. If you cannot afford to buy, then don't. If you want to play games and speculate then you need to know a lot more than you do so what's the point of advising "him" not to buy in Cyprus if you claim to not know much about buying property in Cyprus in the first place?

Oh Lord!

First of all, it is not me buying. It is a relative. Let's make this point very clear.

I was in NYC myself recently for a couple of days and I caught up with this guy as I always do. He asked me about buying a small property in Cyprus.

I advised him to buy in NYC for 3 reasons:
1) Rent Yields are very high in Manhattan and Queens. You can buy a condo in Queens and have a rental return of $7,000USD per month. You can buy a 2 bedroom apartment on Wall Street, Greenwich Village and get a return of $8,000 per month. These are good investments for his family whereas property in Cyprus, should only be contemplated if he has spare disposable money,
2) since Troika, I told him that some things may have changed. There was an IPT and I told him about VAT on new builds. What I was not sure about is whether these amounts changed or other new taxes were introduced, and
3) I told him to Lawyer up and sent him a link to Nigel Howarth's site that BillC mentioned.

A Holiday Home is just that and only for those that have disposable income and clear funds. If not, then NYC is a better option and if he does it right, he will have the income to buy in Cyprus if he wishes to do so, and holiday in Cyprus every year with ease. And we already know the basics of only buying what is affordable (yes thanks for the bleeding obvious coming from a housewife that hasn't worked for ages ) - you sound like our Mothers!!!

Buying property is also easier and the market there is stable now. It is set to rebound from now in which case it will become unaffordable. You can expect a steady income all year round.

As for holidaying in Cyprus, I told him he could either rent and I offered my place to him free of charge if he needed it.

I remember once, when I was buying a resale property, the owner wanted to charge me VAT on that property because that is what he paid when he bought it. He also added the Transfer Fees so in effect he was wanting to charge me the Transfer Fee he paid and also I would be liable to another Transfer Fee to have the property title transferred. This guy told me that this is the way it is done and naturally, I wasn't even sure if that was right but it did not sit well with me. He was even willing to drive me to his Lawyer to draw up a contract.

In other words, there are some scams which Nigel mentions on his website and I sadly confronted one but did not fall victim to it. Sad!

I know enough about property in Cyprus and NYC to know what makes better financial sense and what is easier and more stress free and transparent!

Fair enough?

I think this was sound advice, and it was also confirmed with another cousin of mine in NYC who actually sells property in Greece to rich Americans. Yes there are 2 real estate agents selling Greek property in NYC which I am a client of!

She seconded everything and agreed that NYC property was far more sound financially.

[Svetlana]

The VAT thing is irrelevant; property is worth what people are prepared to pay for it. When VAT was introduced, 'non-VAT properties rose in 'value' - well rose in price as they were now being compared in the Property Market with VAT properties