Buying a property in Cyprus

Legal System

The legal system in Cyprus is mainly based upon the British Legal System. The Cyprus Land Registry is probably one of the most advanced and reliable systems in the world. Purchasers of property in Cyprus will therefore be far more secure, with regard to their Title Deeds, than they might be in another country. Furthermore, legal fees / costs are reasonable and much lower than in other European countries. All contract and other paperwork is in English.

How much property can be purchased?

Now that Cyprus has joined the European Union (E.U.), you can have any number of properties and use them however you choose. As a non-Cypriot or non-EU national, you can have one property registered in your name at one time, which is to be used only as the owner's prime residence or as a holiday home.

Freehold or Leasehold?

Most properties are freehold in Cyprus. There is also some leasehold property for sale and further information is available upon request. Non-EU nationals can own a piece of land not exceeding two donums (2,700m2).

Approval of the Cyprus Authorities for non-EU nationals

Citizens of member states of the EU may purchase property without approval. However, non-EU nationals must seek approval from the relevant authorities. Having signed a 'Contract of Sale' for your property, as a formal procedure, it will be necessary to make an application to the Authorities of the Republic of Cyprus to grant that a non-EU national may acquire immovable property. This procedure may take up to three months, but in the meantime, there is no restriction in taking possession of the property. The main information required for completing the application is:

1. Personal details of the applicant(s) and their financial standing
2. Particulars of the property
3. Particulars of the present owner, the 'Contract of Sale' & terms of payment
4. The way of acquisition, i.e., whether Freehold, Long Lease, by share etc.

Taxes payable

Immovable Property Tax:

The registered owner of the property is liable to an annual immovable property tax, calculated on the market value of the property as at 1st January 1980, therefore is much lower than the current rate and is as follows:

Stamp Duty on Cyprus Property

Unless otherwise stipulated in the contract, the purchaser is liable for the once only payment of stamp duty at the rate of 1.5 per thousand of the value up to CYP100,000. Thereafter, the rate becomes 2.0 per thousand. Although the non-affixing of stamps does not invalidate the contract, the stamp duty plus a fine will be payable when the document is produced to the Court or any Government department. In order to avoid the payment of a fine, which could be substantial, the documents should be stamped within 30 days of their signing.

Land Transfer Tax on Cyprus Property:

Property transfer fees are payable once only to the Land Registry Office either personally or by a Power of Attorney to your Solicitor. The amount payable is based on a sliding scale, as shown below and is borne by the purchaser. The fee is due when the Title Deeds are transferred into his / her name:

Other costs involved after purchase of Cyprus property

Electricity connection CYP 75.00

Water connection CYP 32.00

Telephone connection CYP 100.00

Local Authority Rates on Cyprus Property

Local Authority Rates on Cyprus Property are between CYP50-150 per annum, depending upon the size of the property. This tax is for refuse collection, sewerage, street lighting etc.

The basic utilities are payable individually in accordance with consumption and based on meter readings.

The electricity in Cyprus is 220-240 volts, so U.K. or European bought appliances can be used in Cyprus without an adaptor.

Acquiring the Title Deeds

The Title Deeds of the property are transferred into the buyer's name as soon as they are issued by the Land Registry Department, following the settlement of the agreed selling price. The relevant cost is borne by the purchaser, as detailed in the Land Transfer Tax section (above). This process takes approximately 3-4 years.

For the purchaser's protection, the Land Registry Department provides a simple and effective legal instrument called 'Specific Performance'. Once the 'Contract of Sale' is signed and a deposit paid, the Contract is registered at the Land Registry. The Contract is then in the hands of the Land Registry and therefore cannot be leased, sold, transferred or mortgaged. This procedure protects the purchaser's ownership rights until the Title Deeds are issued and transferred into his name.

Mortgage and Finance for a Cyprus Property

Household and Personal Effects

Selling Property in Cyprus

A qualified valuer should be appointed who will assist in determining the value of your property (the Cyprus Association of Surveyors can be contacted for a recommendation).

Any outstanding property taxes must have been paid and a certificate obtained from the Inland Revenue. Capital Gains Tax is payable at the rate of 20% on the gain with the first CYP10, 000 (ten thousand Cyprus pounds) being exempt for each person. There is an indexation allowance and a further allowance regarding the transfer fees paid.

Gains from the sale of a house are exempt up to CYP50, 000 (fifty thousand Cyprus pounds) in total if the owner resides in it for at least 5 years prior to the sale. The sale proceeds can be repatriated immediately, including any amounts spent on improvements and/or additions to the property, which have been paid for with imported foreign currency. Profits can also be repatriated, but note should be taken of the exchange rate at the time of transfer of funds.