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Legal Info

1. SOLICITORS

It is advisable to consult a solicitor before proceeding to purchase your preferred property. If you do not have one, we would be happy to recommend a reputable independent legal advisor. His duty would be to oversee the details and handle the various documentation and procedures until the property is officially transferred to you name.

2. PROPERTY PURCHASE & OWNERSHIP COSTS
2.1. PURCHASING COSTS

Solicitor's Fees - Between €1,400 – €2,500
Search Fees - Included in the above
Property Transfer Fees - See Below
Stamp Duty Fees - See Below

2.2. PROPERTY TRANSFER FEES

This covers the actual transfer of FREEHOLD ownership to your name and is due when the property is registered in your name at the Land Registry Office. This process is done following the Council of Minister' approval.

The Property Transfer Fees are a once only payable expense to the Land Registry Office based on the following scale (excluding VAT):

Value of Property in € Transfer fee Rate (%)
Up to 85.430  3
From 85.431 to 170.860  5
From 170.861 and over 8


2.3. IMMOVABLE PROPERTY TAXES

The registered owner of the property is liable for this annual tax which is based on the total value of the said property with prices of 1.1.1980.

Value of Property in € Annual Tax Per Thousand in ‰
Up to 120,000 0
120,001 – 170,000 4
170,001 – 300,000 5
300,001 – 500,000 6
500,001 – 800,000 7
Above 800,000 8


2.4. CAPITAL GAINS TAX

Capital Gains Tax is levied at 20% on gains arising from the disposal of the property when the seller is an individual and 10% for legal entities (corporate tax). However, for foreign owned property that is sold, generous allowances and exemptions from Capital Gains Tax exist. As the gain also takes into account inflation, the actual appreciation coupled with the allowances and exemptions results in a minimal taxable amount. The first €85,430 made by an individual are exempted from tax.

2.5. SELLING YOUR PROPERTY

When you sell, you can repatriate all of the funds immediately used to the value of the purchase, including any amounts spent on improvements and/or additions to the property and paid for in properly imported foreign currency.

2.6. STAMP DUTY

The purchaser is liable for the payment of Stamp Duty at the rate of €2.56 per thousand up to the value of €170,860 and thereafter at the rate of €3.41 per thousand. This duty should be paid within 15 days of the signing of the contract.

2.7. MORTGAGE FEES

There is a registration fee of 1% of the amount secured, plus any relevant stamps. Local banks grant loans in the local currency as well as a foreign currency of your choice. Alternatively you can apply for a loan from your own private bank abroad.

3. ON - GOING COSTS
3.1. PROPERTY OWNER COSTS (Approximate average for a 2-bed property, full usage)

a) Electricity: €250, every 2 months.
b) Water: €50 every 4 months.
c) Sewerage: €100 per annum.
d) Common expenses for apartments: €350 per annum.
e) Garbage tax: €150 per annum
(Prices vary depending on location and type of property)

3.2. TAXATION

In the past, double taxation treaties existed with various European countries, which regulated taxation matters regarding residents on the Island. Today, most of these treaties have fallen away. Unless you are retired and have an income solely from external funds, it is up to you to register with the Inland Revenue stating your income and its origin and they will advise you of any applicable restrictions and regulations.

3.3. ESTATE DUTY

Estate Duty was abolished as from 1st January 2000.

3.4. VAT

 

As from January 2013, VAT of 5% or 18% is applicable to purchase property, depending on the status of the buyer.