Legal

Tax and Duties

Fees for the deposit of the Sales Contract in the Land Registry: The purchaser has the right to deposit the sales contract within 60 days after signing of the contract. However the sales contract must be deposited and stamped within 30 days after signing. After this period a penalty is imposed. The fees are 1.5/thousand for values up to £100.000 and 2.0/thousand for values there after plus CYP1 for depositing of the sales contract. Immovable property tax. This is an annual tax, which is paid on the value of the property, and is a fixed percentage per thousand:

Upto £100.000 Nil £100.001 -£250.000 2.5
£250.001 -£500.000 3.5 £500.001 and over 4.0

Vat: The decision of 15% VAT on new build property has been passed, with the exception of projects or buildings which have already applied for the planning permit prior to the 1st May 2004. This decision affects all new projects coming onto the market, but the price increase to clients will be closer to 10% due to some of the tax being applied to materials used. There is no VAT applied to the purchase of land up until 2007. VAT is also exempt for re-sale properties.

Capital gains tax: In the case of reselling your property and there is a difference between the purchase price, and other costs incurred, such as inflation, interest costs, improvements etc., the sales price is liable to the capital gains tax of 20% any profit may be taken out of Cyprus at the rate of Cy 10.000 plus interest, per annum, commencing the year after the sale. The first £10.000 of the difference is exempt. In case of a permanent resident the amount is increased to £50.000 per year.

Local Authority Tax: Depending on the size of your property, a tax is charged on yearly bases, covering the cost of sewerage, garbage collection street lighting fees, etc. This ranges from CY£ 30.00 - CY£ 100.00.

Communal Expenses: These expenses are charged to an owner who is part of a complex and according to the size of their property they give a share towards the cost of cleaning and maintaining a project's communal areas, gardens, swimming pool, management fees and repairs. These fees are payable monthly or yearly and are estimated according to their property and services charged.
Electricity & Water Supply: Utility bills for these services are payable to the appropriate authorities at fixed intervals throughout the year. These bills vary according to the number of people living in the property and the size of the property. The electricity bill for two people for example living in an apartment will be approximately £50 every two months (taking the use of air-conditioning into account) and a water bill will be approximately £10 - 12 every two months.

Insurance: Comprehensive insurance against fire and associated hazards can be arranged by us, until the title deeds are transferred to the owners. An insurance covering content of your property can also be arranged.

Income Tax: Under Cypriot law you are required to declare any income including your pension. Income tax is broken down into two groups, as shown below:
1. If your income is from a pension you are required to pay 5% income tax. The first 6,000cyp is exempt.
2. If your income is from any other source you are required to pay 5% income tax. The first 2,000cyp is exempt.

Title Deeds

The Land registry department, of the Cyprus Government, issues title deeds a few years after completion of the project. Individual houses follow the same procedure. The following documents are required to be submitted in order for property to be transferred to your name as a purchaser:

A confirmation by the Central Bank that the purchase was with foreign funds, which was imported into Cyprus.
The sale contract
The Ministerial Council's permission for the purchased property.
The property's title deeds, if available.
Confirmation that all taxes for the purchased property [sewerage, immovable property, town taxes etc] have been paid.

Transfer fees are paid on the value that the Land Registry department determines that it is the Open Market Value of the property on the day of the original transaction /sales contract.
The transfer fees are shown on the following table:

Property Value (Cy)	Transfer Fees %	Accumulated Transfer Fees (Cy)
0 - 50.000	3	1500
50.001 - 100.000	5	4000
100.001 - and over	8	-

For example: For a property valued Cy 50.000 the purchaser should pay Cy 1.500 and for Cy 100.000 the amount of Cy 4.000.
Please Note: A Power of Attorney can be issued to a third party to attend and conclude the transfer on the buyer's behalf. There is a transfer fee advantage if the property is registered in the name of the two spouses [husband +wife] as the total purchase price is divided by two, thus lowering the rate of the transfer fee.

Permission to buy property

Buying a home in Cyprus is not as complicated as one might think as Cyprus, in common with most countries, regulates and controls the acquisition and ownership of immovable property by foreigners. The Cyprus legal system, established during 1875 is primarily based on its English counterpart and with its constant updates throughout the years, it is considered one of the most sophisticated land registry systems in the world.
The process is straightforward and makes it easy for buyers to purchase in Cyprus.

For a non-Cypriot wishing to purchase land or property in Cyprus, authorisation is required from the Council of Ministers.
The permission of The Council for the 'acquisition of immovable property by non-Cypriots' is obtainable in all bona fide cases, and is granted for residential properties almost as a matter of course. During this process however the purchaser may take possession of their property without restriction, live in it or rent it out while waiting for the application to be approved. The application can be made within a reasonable amount of time after signing the contract of sale; a lawyer is needed to apply on your behalf, it normally takes about 6-8 months to be issued.
EU citizens that are permanent citizens in Cyprus and legal entities established in EU countries that have their headquarters and registered office in Cyprus do not require permission to buy any immovable property. Legal entities established in Cyprus and controlled by citizens of the EU require permission to buy immovable property in Cyprus as well as any other legal entities.

EU citizens are allowed to purchase however much property they choose and do not require permission to buy. Non Europeans are entitled to a freehold ownership of a villa, an apartment or a piece of land, with maximum allowed extends of 4014 sq.meters (four thousand and fourteen square meters).