Simple answers to the most frequently asked questions regarding the stamp duty in relation to real estate agreements.
Stamp duty is form of a tax paid on signed documents concerning property or other matters performed in, or related to, Cyprus.
Documents such as contracts of sale, loan agreements, mortgage agreement, pledge of shares agreements, construction agreements, tenancy agreement and charges over property are subject to stamp duty if related to Cyprus.
Stamp duty is calculated on a tiered system based on the value of subject matter of the agreement. No stamp duty is payable for agreements with consideration up to €5,000. For agreements with consideration between €5,000 and €170,000, the rate is €1.50 for every €1,000 or part thereof, for agreements with consideration above €170,000, the rate is €2.00 for every €1,000 or part thereof.
A stamp duty online calculator is available on the Tax Department's website under Direct Taxation / Other Information / Stamp Duty Calculator. Other private websites of brokers and other professionals also offer online stamp duty calculations.
Yes, the maximum stamp duty payable is capped at €20,000.
The stamp duty is €34.
It is a flat rate of €2 per document.
Stamp duty must be paid within 30 days from the date of execution of the document, or within 30 days after the document is received in Cyprus if executed abroad.
A surcharge of 10% of the unpaid amount is added if paid within six months after the due date; otherwise, the surcharge is twice the unpaid amount.
Yes the maximum is €4,000
No payment of stamp duty does not invalidate the agreement. Possibly, the document cannot be used as evidence in court without payment of the duty and the appropriate penalty. Most importantly, agreements which are not stamped are not accepted by government authorities, such as the tax office or the Land Registry and thus you will be unable to secure tax clearances or lodge an agreement with the Land Registry for specific performance purposes unless the agreement is duly stamped.
The parties can decide who pays the stamp duty. If not specified, it is usually paid by the purchaser, issuer, insured, assignee, or tenant (depending on the type of agreement).
You calculate the stamp duty using the online tool, send the calculation form to the Tax Department via email, purchase the relevant stamps, and cancel them by signing and dating.
You calculate the stamp duty using the online tool, present the calculation form at the District Office of the Tax Department, pay at the cashier desk, and have the stamps affixed by the Stamp Duty Officer. Alternatively, you can pay online, through the Cyprus government tax portal, by direct transfer or credit/debit card, using the code generated by the calculator, but the Stamp Duty Officer will only accept to affix the stamp once payment clears. This may take a few days.
Stamp duty is imposed pursuant to the Stamp Duty Law of 1963, as amended. The decisions, circulars and guidelines issued from time to time by the Stamp Duty Commissioner are also relevant.
The Stamp Duty Commissioner, part of the Inland Revenue Department, is the regulatory authority concerning stamp duty.
For more information on this or any other property law-related matter, you can contact the author and his team of expert property law practitioners at [email protected].
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