|LEGAL REQUIREMENTS & COSTS|
Cypriots are allowed to buy property in Cyprus without any restrictions. EU citizens other than Cypriots are allowed to buy a home just as Cypriots, but for a second home they require permission by the government; this restriction for a second home will be lifted from the 1.5.2009. After this date EU citizens will be allowed to buy whatever property they wish just as Cypriots.
Aliens are allowed to buy one of the following:
- One apartment
- One house
- A building plot or land up to 3 donums (4,014 m2)
- A couple can only buy one home, not one each person.
Permission to transfer property as above to an alien's name is required to be obtained from the Council of Ministers or the related District Officer.
Application to the Ministerial Council or the District Officer should be accompanied by:
- Personal details and financial status of the applicant
- Particulars of the property
- Particulars of the vendor, the sales contract and terms of payment
- Evidence of the type of acquisition, i.e. whether freehold, long lease or shares
The approval may take three months but there is no restriction in taking possession of the property in accordance with the sales terms. It is advisable to file the sale contract at the District Lands Registry within two months from signing so as to ensure the issuing (by the courts) of specific performance if necessary (i.e. for the transfer of the property in your name).
The transfer of ownership is concluded by a relatively simple procedure which, however, requires the vendor and buyer or their legal representatives to be present and testify in front of the Lands Registry official.
The application must be accompanied by:
- Title deeds of the property
- Copy of the Ministerial Council's permission
- Central Bank's evidence that the property was acquired using foreign currency
- Receipts of payment of all property taxes to date (town tax, sewage tax and road construction tax)
Transfer fees are as follows:
- For property value CY.P. 50.000 - 3%
- For property value CY.P. 50.000 - 100.000 - 5%
- For property value CY.P.100.000 and over - 8%
Immovable Property Taxes are as follows (calculated on the market value of the property as at 1 January 1980):
- Up to CY.P. 100.000 - Zero
- CY.P. 100.001 - 250.000 - 2.5‰
- CY.P. 250.001 - 500.000 - 3.5‰
- Over CY.P. 500.000 - 4.0‰
Capital Gains Tax is levied at the rate of 20% on gains arising from the disposal of immovable property or of shares of a company which owns immovable property. In the case of property purchased before 1 January 1980 these gains are the difference between the sales proceeds and the market value as at 1 January 1980 as adjusted for inflation. Estate duty was abolished as from 1 January 2000.
Common expenses in blocks of flats are relatively small especially if you avoid buying in blocks with common central heating and or common hot water supply.
A check must be made with the District office of the Electricity Authority of Cyprus regarding the supply and its cost. A check must be made with the Water Development Department regarding the possibility of drilling a borehole if it is required in addition to the public water supply or as the sole water supply in remote areas.
The local banks in Cyprus can offer a variety of loans. The normal charge is the basic interest rate plus 2%.
Mortgage fees are additional, at 1% of the mortgage amount. Our company will gladly make an introduction to a bank for a possible loan.
Our company will furnish, if required, a bank guarantee as security towards the purchase of property until the issue of the title deed. The relevant bank charges will be borne by the purchaser.
Cyprus has double taxation agreements with European and other countries safeguarding the residents from paying double taxation.
Persons of non-Cypriot or other EU nationality who wish to reside permanently in Cyprus must apply to the Committee of Aliens Control for the necessary resident's permission.