Regulations & Proceedures for Acquisition of Immovable Property in Cyprus

Cypriots & E.U citizens

Under Cyprus Law, Cypriots or persons of Cypriot origin as well as E.U citizens are allowed to acquire any property without any restrictions.

Non E.U citizens

Non E.U residents, wishing to purchase immovable property in Cyprus are obliged to adhere to special formalities and are restricted by certain regulations.

A restriction to the type and size of the property is applied. Non EU citizens are given permission to buy only one apartment or one house or a building plot or land., up to 4,014 square meters (the equivalent of three donums) and must obtain the permission of the Council of Ministers prior to the acquisition of real estate property.  Recently these powers have been assigned to the pertinent Authorities of every district, in order for the procedure to become speedier.

After the permission has been obtained and the property has been registered in the name of the purchaser, there are no other restrictions for foreigners who are the owners of immovable property in Cyprus. They may sell or dispose of the property as they wish.  The foreigner owner of immovable property can sell it and buy another and as any bona fide repeat purchaser will be granted a subsequent permit.

Acquisition of Real Estate Property in Cyprus includes:

  • Transfer of title deed
  • Long lease for periods of more then 33 years
  • The acquisition of shares in a company that owns immovable property, if such acquisition results in the company becoming controlled by foreigners
  • The establishment of a trust or any typeof set-up, which is connected with the ownership of real estate, for the benefit of a foreigner, including tax benefits

Although the proceedings for the obtaining of the permission might need a considerable amount of time to be fulfilled (about 3 months), purchasers are entitled to occupy their properties until then.

Furthermore, any contract for the purchase or lease of property is valid even if the Pertinent Authority rejects the foreigner’s request for permit. As such, when purchasing a property, it is advisable for the relevant contract to include provisions for such an event so as to secure a refund of any money paid or any other remedy.

The application to the Pertinent Authority requires information about the personal details and financial standing of the applicant and particulars of the property and its present owner.  Also it must be accompanied by a number of legal documents.

As a general rule, permission is granted to bona fide applicants provided they have:

  • No criminal record in their country or in Cyprus
  • The financial means to support themselves in Cyprus. (An income of €20,503 per annum between the couple is considered satisfactory)

Overview of Procedure

The legal work in purchasing immovable property is completed in 3 stages:

1. To buy the property – This is completed when you sign the contracts. At this stage, the purchaser pays stamp duty and land registry fees.

2. To take possession of the property – This is completed when the property is delivered to you. At this stage the purchaser pays for the utilities to be connected.

3. To transfer the deeds in your name. – This will be completed when:

a. The Council of Ministers Permit is secured (such a permit is not required if the property you buy is a plot of land or a field).

b. The Vendors complete the subdivision of the project through the Lands Office. The Purchaser pays the transfer fees at this stage. (Where applicable)

 

In the meantime, the legal security for the above stages will be provided by the following:

1. The Purchaser signs a valid contract of sale for an existing property from the Vendor free of any legal and financial impediments.

2. A valid contract will be signed, stamped and registered with the Land Registry Office. This procedure prevents the Vendor from the possibility of reselling.

3. The Purchaser will be entitled to secure possession of the property prior and regardless of when the transfer of title deeds takes place.

Fees, Charges and Property Taxes

Transfer fees

The transfer of immovable property into a purchaser’s name can be effected once permission to acquire the property has been granted from the Council of Ministers/Pertinent Authority (where that is necessary – see point 3 above).When registering the property under his/her name at the District Land Office, the purchaser will be liable to pay the following transfer fees, calculated according to the property’s market value at the time of signing of the contracts:

Market Value of Property (€)

Transfer Free Rate (%)

Up to €85,430.10

3.0

From €85,430.10 to €170,860.14

5.0

Over €170,860.14

8.0

Stamp Duty

On the signing of a contract the purchaser is liable to pay stamp duties at the rate of 0.151% up to €170,860 and thereafter at the rate of 0.201% per €1,709. The Purchase Contract must be stamped within 30 days of its dated signature, otherwise a fine will be imposed.

Immovable Property Tax & Services Tax

Upon transfer of the property and registration in the purchaser’s name, the District Land Registry Office, will charge Transfer fees.

Value of Property (€)

Transfer Fee

1.710 - 85.430

3%

85.431 - 170.860

5%

170.861 and over

8%

The Municipal Authorities also levy an Annual Property Tax at a rate of approx. €34 to €51 per year. Other authorities may also impose a Sewage Tax of between €34 and €68, depending on the value of the property.

Capital Gains Tax

If the purchaser decides to sell the property at a later date, Cyprus Law provides that the full amount paid for it in foreign exchange, may be transferred abroad at the time of the resale. The equivalent of the full purchase price and any increase in value of the property may be transferred immediately. Property sales in Cyprus are subject to Capital Gains Tax at the rate of 20% on the gain, however, the first €17,086 are tax exempt. Provided two buyers (maximum 2) are on the original Contract of Sale, then the tax allowance can be up to €34,172.

Inheritance Tax

Inheritance Tax is not imposed.

Tax Privileges

Personal effects, household goods and furniture can be imported duty free by immigrant retirees, provided they are for personal use and have been used for a reasonable period of time; approximately one year. Also, no duty is levied on cars, allowing retired couples to enjoy the additional concession of two duty free cars.

Tax Advantages

Retirees drawing a pension are exempt from withholding taxes at source, and may be taxed at the nominal rate of approx. 5% or less, depending on income. Additionally, Cyprus has Double Taxation Treaties with many European and other countries, safeguarding its residents from paying tax in both countries.

Local Authority Fees

Depending on the size of your property, local authorities charge between €85 and €256 per annum for regular refuse collection, street lighting, sewerage and similar community services. Communal Services fees are payable to your local Municipal Authority.

Municipality Tax

As the registered owner of the property, you are required to pay an annual Municipality Tax, calculated on the market value of the property as at 1st of January 1980. Rates vary from 1% to 2%. Municipality Tax is payable to your local Municipal Authority.

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