Land Registry Department The Land Registry system in Cyprus was established during 1875 and was originally based on British standards. Over time it has been updated making it one of the most sophisticated land registry systems in the world.
Purchasing property in Cyprus, therefore, is a very straightforward procedure.
Permission to buy property Permission to buy property is required from the Council of Ministers by written application, and then submitted by the non-Cypriot purchaser after the agreement is signed. But before that purchasers may take possession of their property without any restriction. The application to the Council of Ministers to purchase immovable property in Cyprus can be made within a reasonable period of time once having signed the contract of sale.
EU citizens that are already permanent citizens in Cyprus wanting to buy immovable property do not require permission. The same applies for legal entities established in EU countries that hare their headquarters and registered office in Cyprus. Legal entities established in Cyprus and controlled by EU citizens require permission to purchase immovable property in Cyprus as well as any other legal entities. Beltax undertakes submition of the application on client’s request at a fee.
Financing for the purchase of property Financing schemes can be obtained through all banking institutions in Cyprus. The base rate of interest charged is given by the Central Bank of Cyprus and is approximately 5,5%.
For overseas buyers with financing schemes can be made on their local currency with repayment periods of up to 10 years or in Cyprus Pounds with repayment period of up to 25 years.
Legal costs incurred The fees may range between £800 and £1000, payable on signing the contract to the solicitor.
Property duties and other costs with the purchase of property in Cyprus
Stamp Duty and Mortgage Fees: With a sales contract the buyer is liable for the payment of stamp duty at the rate of 1,5 per thousand of the value up to £100.000. Thereafter the rate becomes 2,0 per thousand. The duties and fees are payable when signing the contract of sale.
Transfer Fees: Once the Council of Ministers’ permission is obtained and the Central Bank of Cyprus confirms receipt of the foreign funds the transfer of title can take place.
Once the transfer of the property and registration in the purchaser’s name Is completed, the district Land Registry Office will charge transfer fees, based on the market value of the property at the time of the purchase and are calculated as follows:
Value up to CY£ 50.000 3% CY£ 50.001 - CY£100.000 5% CY£100.001 - and over 8%
Transfer fees are charged accumulatively and are payable at the time of issue of title deeds (usually it is 3 – 5 years after final delivery of property). For properties owned by a couple, transfer fees are charged on the 50% of the property value for each, providing an advantage for any property value exceeding CY£50.000.
VAT payable on property VAT must be paid when buying a house since Cyprus accession to the E.U. In exceptional cases where an application for a town permit was filed before the 1st of May 2004, VAT will not be charged.
VAT applied will have two rates, 5% for the first purchase of residence by permanent residents of Cyprus and 15% for any other purchase. For the purchase of land, no VAT will be applied until the year 2007.
Capital gains tax Cyprus Law allows the full amount paid in foreign exchange and may be transferred abroad at the time of resale if the purchaser decides to sell the property at a later date. The equivalent of the full purchase price and any increase in the value of the property may be transferred straight away. Property sales in Cyprus are subject to capital gains tax at the rate of 20% on the gain, however, the first CY£10.000 of gain are tax-exempt. If a couple jointly owns the property, CY£20.000 of gain are tax-exempt.
It is tax-exempt up to CY£50.000 if you are selling for the first time your private residence, of which you were the owner for at least 5 years.
Annual property tax 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 of January 1980. This varies according to values between 0 – 4 CY£ per thousand. Average cost is CY£50 – CY£100 per annum, per unit.
Other Property Taxes: There are taxes paid to the Municipality and depend on the size and value of the property. It covers refuse collection, sewerage, street lighting, etc. and it varies according to the area, from CY£50 – CY£150 per annum per unit property.
Inheritance Tax There is no inheritance tax in Cyprus.
Legal safeguards for foreign buyers The contract of sale must be in writing and it is advisable to be registered at the District Land Registry within sixty days from the contract date. By doing so this protects the buyer’s rights to the property providing additional safeguards. Also, when the title deed is issued (2 – 5 years after the completion of the project), it will be registered in the name of Beltax Ltd and then it will be transferred to the buyer and recorded in the government archives. The government archives are confidential and will not be published or made accessible under any circumstances.
Selling your property In case the buyer wants to sell the property before the title deeds are issued, the contract between him/her and Beltax will be cancelled and a new one will be issued between Beltax Ltd and the new purchaser. Provided that you have a valid contract and a purchaser. Cancellation fees are charged to the seller at CY£1.500, covering cancellation fees and expenses.
