In a property transaction the purchase price is not the whole budget. Taxes and fees form a significant part of the total cost, and factoring them in early avoids surprises.
1. Title deed fee
The largest ancillary cost of a transfer. It is calculated on the declared sale price and, by law, shared equally between buyer and seller. In practice the parties may agree otherwise — put it in the contract.
The base for the fee cannot be below the municipality's assessed market value. Declaring less exposes you to tax penalties.
2. VAT
VAT only arises on commercial sales — where the seller is a developer, construction company or otherwise trading. No VAT arises on a sale between two private individuals.
The rate can vary with the net floor area and the land unit value of the development. If you are buying new-build, always clarify whether the quoted price includes VAT.
3. Property tax
Paid annually to the municipality where the property sits, in two equal instalments (typically March–May and November). The rate varies by category — residential, commercial or land — and whether the property is within metropolitan boundaries.
Exemption: A reduced (zero) rate may apply to pensioners, homemakers, the unemployed, veterans and families of the fallen who own a single home and have no income. It requires an application and is not applied automatically.
4. Capital gains tax
The most frequently overlooked item. If you sell a home within five years of buying it, the difference between the purchase and sale price counts as a capital gain and is subject to income tax.
- No such tax arises on a sale after the five years have passed.
- The purchase price is indexed by the domestic producer price index over the intervening months, which materially reduces the taxable gain.
- There is an annual exemption threshold; if the gain falls below it, no tax is due.
- The tax does not apply to the sale of property acquired by inheritance or gift.
5. Other items
- Revolving fund service charge: a fixed sum paid to the Land Registry.
- Mortgage registration fee: on the loan amount, if borrowing.
- Valuation fee: the mandatory report for a bank mortgage.
- DASK premium: based on floor area and construction type.
- Agency fee: for licensed consultancy services.
Budgeting
A practical approach: set aside 4–6% of the purchase price for ancillary costs. With a mortgage, valuation, charge registration and insurance push this a little higher.
Rates and exemption thresholds are updated annually. Confirm current figures with the Revenue Administration or your accountant before proceeding.
