Cyprus Property - Allow an Extra 11% for Costs

Beware those hidden costs in buying a home
By Jean Christou

CYPRUS is placed 14th out of 37 European countries when it comes to transaction costs in purchasing a house, with buyers needing an extra 11 per cent to cover fees and charges when they buy here.

A study by the Global Property Guide shows 23 countries with lower transaction costs than Cyprus, including Malta at just over 9.0 per cent, Ireland at only 6.9 per cent and the UK at 5.03 per cent.

“Residential investments in Europe incur punitively high roundtrip transaction costs in many countries, exceeding 15 per cent in several cases. Purchasers of new properties often incur even higher costs,” the study said.

The study takes into account all transaction costs involved in the property sale-purchase process, including registration and notary fees, legal fees, real estate agents’ commissions, and sales and transfer taxes.

In many countries, including Cyprus, VAT at 15 or 20 per cent is added on the purchase of new homes, hiking the cost up even more. “Buyers of new residential property are in for a shock, because additional taxes are charged on newly constructed or renovated properties,” said the study.

The lowest charges are recorded in Lithuania, where buyers pay only 2.3 per cent on top of the cost of their new homes. Other countries under ten per cent include Turkey, Denmark, Switzerland and Norway.

Buyers in Russia will pay the highest amount in transaction costs at 25 per cent, with Bulgaria at 24.8 per cent and Monaco 19.6 per cent, Belgium, Italy, France and Greece are close to the 15 per cent mark.

While actual registration costs in Cyprus are among the 12 very lowest of the 37 countries, transaction costs rise dramatically when agent’s fees and sales and transfer taxes are added. Legal fees, which also comprise part of the four criteria, are also low in Cyprus.

Copyright © Cyprus Mail 2007

Cyprus Property Help & Advice Centre™ ® ©
The Black Art of Buying Property in Cyprus™ ®
The Cyprus Informer™ ® ©
http://cyprusinformer.eu

Related posts:

1. Mortgages in CyprusThe Editor saw this scenario and felt that it was the basis of a wider article explaining this particular issue and looking at the present mortgage position in Cyprus. "We have contacted the developer and have been informed by Mr.  ***** that the mortgage is there, which is not due to anything outstanding to the bank but purely so that...
2. Cyprus Property Bubble on Verge of Bursting  A new Cyprus Law is proposed making any mortgage rank behind a registered contract for sale will mean that banks will want their money back. Once the mortgage is out of the way then Title Deeds can be issued doing away with waits for legal ownership of 10 years or more becoming a thing of the past. Also Contracts with...
3. Deposits - Cyprus Property Buying  Purchasers are often asked by Developers and Estate Agents to give a cash deposit to, for example, secure a particular property and take it off the market, secure the purchase price or simply show goodwill in the transaction.  Often these are declared upfront to be non refundable.  We don't agree that this is appropriate because the deposit and all payments should...
4. Mobile Home Sites in Cyprus - An New Attractive Proposition for UK InvestorsPeople will always wish to live in a climate as Cyprus is lucky to have.    Image courtesy of http://www.cyprus-lodgehomes.com/ So what do UK Investors know most about that the others do not?  Mobile and Lodge Homes is the answer.  There are many, many holiday and semi residential sites across the UK.  Spain and France have been "invaded" by the mobile...
5. Cyprus Property - Low-cost flights swell numbers to euro-havenTelegraph 24/03/2007 Cyprus is a British favourite and development is proceeding apace. However, some believe that the essential quality of the island could be compromised. Ben West reports Agents and developers in the south of Cyprus - the Greek sector - have been trumpeting the fact that budget airline Monarch is about to launch low-cost flights from Britain to the...
6. Beware of Black Money in CyprusBlack Money is common in transactions in Cyprus.  I once saw an article which alleged that only 4000 people pay tax in Cyprus !! What is a black money transaction?  Another way of looking at it is an "under the table" transaction or part of a transaction. Black Money is used as a way of reducing income tax because it...
7. Cyprus Property News Snippets  VAT on Land Sales This was due to be introduced in January 2008 which coincides with the change over to the Euro. The Cyprus Government has asked the European Commission for permission to defer this until July 2008.  Other rumours include a deferral until 2010 and that the VAT rate will be 6% but there have been no official...
8. Fraud in Cyprus"fraud in Cyprus does not exist as specific criminal offence" When the Editor saw an article headed " Shark hauled up off Paphos" in the Cyprus Mail, he immediately thought of the Cyprus Informer article Beware of Property Sharks. But it was a real shark where Egyptian fishermen had caught a large shark, 2.5 metres, called ‘Pambakas’.  So we know...
9. The Cyprus Property MarketThis article can help a Cyprus property buyer decide if a price asked is realistic and guides new Cyprus property buyers to the Re-Sale Market and what to pay. It also looks at the position of Cyprus property sellers and how they can price to sell. The problems for The Brits with the Cyprus property market are not solely to do with...
10. Cyprus Property Market - A Survival Guide  The Cyprus Informer says "it is not a great time to buy off plan right now with the build in of big commissions and VAT which have to unwind. That might not unwind by appreciation over the next 2 years or so as the Cyprus market currently comes off boom if you wanted to sell quite quickly. But looking...