Buying Process
Buying a home in Cyprus couldn't be easier. All you have to do is simply choose your new property and you will be taken step by step through the administration procedure.
First of all though you need to know what you will be allowed to purchase. If you are an EU citizen.
Acquisition of property by EU residents
From May 1st 2004 Cyprus became a full member of the European Union. That will make the procedure for purchasing a property in Cyprus easier for those who are citizens of other EU countries. The permission of the Council of Ministers will no longer be necessary. Please note that certain restriction may also apply for EU residents for a period of time (grace period) that was given to Cyprus from the EU in order to harmonize its laws with those of the EU. Legal advice is strongly suggested before entering into a deal concerning immovable property in Cyprus/ Please note that neither this information nor any information contained in this web site constitutes legal advice.
Restrictions
Foreigners, (non EU citizens) are given permission to acquire one of the following:
* An apartment
* A house
* A building plot, or land, up to approximately three donums, (4,014 square meters).
An International Business Company, (I.B.C.), may also acquire premises for their business and for the residence of their foreign employees provided they maintain a fully-fledged office.
In certain cases, it is possible that the Council of Ministers will grant approval for the acquisition of a larger area of land, by a foreigner, if the land is to be used for certain tourist developments, (e.g. Hotel or Hotel Complex), especially if the intended project is in an area where the Government wishes to promote tourism. A similar stand is taken for certain industrial sectors.
Acquisition of property by non-EU residents
The new owners will need to gather and submit the following information, which would be included in the contract of sale and normally carried out by their legal representatives:
* Particulars of present owner
* Terms of payment
* The way of acquisition (i.e. Freehold, leasehold shares in property company etc)
* Copies of the government survey plans
The completed application form is submitted to the District Officer in the district where the property is situated. The District Officer together with other relevant government departments will make further enquiries and prepare a report, which is submitted, to the Council of Ministers through the Minister of Interior.
The letter of approval or refusal may take up-to six months or even longer. However, there is no restriction in taking possession of the property in the meantime.
The permit for the acquisition of immovable property by a foreigner is granted if:
* The house will be used only for their own residence and the building plot or land does not exceed 4,014 square meters
* It is used for professional or commercial business
* It is used in manufacturing in areas where the Council of Ministers believes that it will be for the benefit of the Cyprus Economy and the production of products that are related to the use of new technologies or technical knowledge.
The permit has the following conditions and restrictions:
* The transfer to be effected within a year from the date of the permit or within three years in case of constructions of a building on the property.
* Thus on disposal of the property the whole amount can be exported (after the tax obligations have been met). The Central Bank of Cyprus requires a clearance certificate.
Immovable Property Tax
This tax is imposed on the market value of every registered owner whose immovable property exceeds C£100,000 must submit a declaration of immovable property (IR 301 and IR 302) and pay the respective tax every year before 30 September.
Immovable Property Tax Applied up to 31.12.2002
Applicable from 1.1.2003
Up to £100.000 NIL NIL
£100.001 to £250.000 2,0‰ 2,5‰
£250.001 to £500.000 3,0‰ 3,5‰
£500.001and over 3,5‰ 4,0‰
Capital Gains Tax
On disposal of the property, there will be capital gains tax at the rate of 20 per cent on the gain. The first CY£10,000 (or CY£50,000 in the case of one's private residence) is exempt and there is also an indexation allowance. However, there is no tax if the property was acquired between 1 August 1980 and 13 July 1990 with foreign exchange imported into the Republic.
Acquisition of real estate property includes:
Transfer by Registration
Long leases of more than 33 years
The acquisition and control of shares in a company, which owns real estate, if such an acquisition results in the company becoming controlled by foreigners.
The establishment of a trust or other set up for the benefit of a foreigner.
Application to the Council of Ministers and application form details
The acquisition of real estate property by foreigners requires the approval of the Council of Ministers under the Immovable Property Acquisition (Aliens) Law Cap. 109. The details required for the application form are as follows:
Personal details of applicant
Financial standing of applicant
Particulars of the property
The costs to be paid in foreign currency
All taxes to be paid
The permit is given for the specific property and use only
The Central Bank will provide a certificate evidencing that the purchase consideration was paid in foreign exchange on submission of the following documents on form EC/NR/01:
Contract of Sale
Copy of the Council of Ministers' approval to acquire the property
Certificate from the commercial bank evidencing the importation of foreign exchange
Registration certificate of the property
Application to the District Land Office
The transfer of ownership is effected at the District Land Office on submission of the following documents
Application form N.270
The registration certificate of the property
Copy of the Council of Ministers approval
Central Bank's approval
Evidence of payment of all the property taxes to date.
Central Bank Exchange Control Regulations
As from 1 February 1997 the acquisition of real estate property in Cyprus by foreigners and International Business companies is no longer affected by foreign exchange controls.
Immovable property as at 1 January 1980 and applies to the immovable property held by the taxpayer on 1 January of each year. Physical and legal persons are both liable to this tax.
The tax rates are as follows:
Estate Duty
Estate duty has been abolished since 1st January 2000.
Transfer fees
When the Land Registry Office registers the immovable property in the name of the purchaser, the purchaser has to pay the transfer fees at the time the title deeds are transferred into their name. This can sometimes take as long as 2-3 years
As from 19th March 1999 the transfer fees are as follows: Transfer Fees Value of Property CY£ Transfer fees rate per cent Accumulated Fees C£ 0 to 50,000 50,000 to 100,000 over 100,000 3% 5% 8% 1,500 4000
Stamp Duty
The purchaser is liable for the payment of stamp duty at the rate of CY£1.50 per thousand up to the value of CY£100,000, and then at the rate of CY£2.00 per thousand. This payment has to be made within 30days of signing of the contract of sale. This is usually arranged by the solicitor and charged to the purchasers account.
It must be made certain that the seller has a valid title to the property and that there are no encumbrances which will present problems with the transfer of ownership.
In the case of purchase of an apartment or house it must be checked that the seller has secured the building and other permits and can be delivered with vacant possession.
Legal advice to be obtained.
In the contract of sale a provision should be made that the money already paid must be refunded should the council of Ministers refuse the application.
A copy of the contract of sale should be deposited with the District Land Office.
When buying an apartment, house etc it is very important to enquire as to the reputation and reliability of the developer.
Important: The information given does not constitute legal advice and is subject to change according to the laws of Cyprus.
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