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
