Anesperon Developers

The Cyprus legal system in based upon the same principles as those applicable in the British and the European legal systems. The Cyprus Land Registry is modelled on the British system. It is probably one of the most advanced and reliable systems in the world. Purchasers of property in the Republic of Cyprus will be far more secure regarding the ownership of their property compared to purchasers of real estate in other countries. In addition, legal fees/costs are reasonable and much lower compared to other European countries. The language used on all legal paperwork is English. All these make property purchase and other legal transactions understandable the majority of expatriates.

Land Metric System

Land in Cyprus is measured in donums (or skala).  To help you to put the sizes into perspective you can use the following:

One plot of land is 500 m2, enough for one standard local house to be built on.

One donum is 1337 m2 (14,855 sq ft) or one-third of an acre.

One donum is also 2.5 plots.

The procedure for purchasing property in Cyprus

Buying property in Cyprus is simple and easy. European Union (EU) citizens have no restriction on the amount of land they can buy. Non-EU citizens can purchase a freehold property (house, apartment, plot, or parcel of land) up to 4014 sq. meters maximum. 

EU citizens can establish their own company in Cyprus. They can acquire property for their business activities or for the residence of their employees. 

After the contract is signed and a deposit paid, a stamp duty - at the rate of CYP1.50 per CYP1,000 up to CYP100,000 and thereafter at the rate of CYP2 per thousand - is payable by the purchaser. To avoid the payment of a fine, the contract must be stamped within a 30-day period after its signing. 

The purchaser has the right to submit the contract of sale of the property to the District Land Registry Office within two months after signing the contract. This is called ‘Specific Performance’ and is done for the purchaser’s protection. After the District Land Registry Office gets hold of the contract, the property cannot be leased, sold, transferred or mortgaged. This simple procedure protects the purchaser’s ownership rights until the Title Deeds are issued and transferred into his or her name.

Before transfer of the property sold in the name of the purchaser, permission must be sought from the Council of Ministers. The permission is granted as a matter of course to all purchasers.

The transaction is concluded with the transfer of ownership by a simple process of registration at the District Land Registry office once the permission from the Council of Ministers is granted and as soon as a separate title deed for the property sold is issued by the District Land Registry Office.

For example, if the property price is CYP 90,000:

       The first            CYP 50, 000 x 3% = CYP 1,500

       The remaining  CYP  40,000 x 5% = CYP 2,000

                                                                -----------------

                                                         Total CYP   3,500

When the purchase is made in joined names, the total purchase price is divided by two. Each purchaser pays transfer fees on the half of the purchase price. Therefore, the purchasers have a fee reduction advantage.

For example, if the property price is CYP 90,000: 

Each purchaser will pay transfer fees on CYP 45,000.

The first purchaser will pay CYP 45,000 x 3% = CYP 1,350

The second purchaser will pay CYP 45,000 x 3% = CYP 1,350

                                                                                  ----------------

                                                                            Total CYP 2,700

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 January 1980. Therefore is much lower than the current rate and is as follows:

Market Value (CYP)

Annual Tax

Total Tax per year (CYP)

Up to 100,000

zero

zero

100,001 - 250,000

2.00%

200-500

250,001- 500,000

3.00%

500-1,250

over 500,000

3.50%

1,250 and over

The Municipal authorities impose a yearly property tax for services rendered at a rate of approximately CYP 50-150 per year, depending upon the size of the property. This tax is for refuse collection, sewerage, street lighting etc.

Capital Gains Tax

Those who acquired real estate in Cyprus before 1 August 1980 or after 13 July 1990 are subject to tax on capital gains resulting from the sale of their property. If you decide to sell your property in the future, Cypriot laws states that the full sale price paid for it in foreign exchange may be transferred abroad at the time of resale. The equivalent of the full purchase price and any increase to the value of the property maybe transferred immediately. Property sales on the Republic of Cyprus are subject to Capital Gains Tax, at the rate of 20% on the gain. The first 10,000cyp of your gain for each person are tax free and there is an indexation allowance.

Income Tax

The Law at the Republic of Cyprus requires you to declare any income including your pension. Income tax is broken down into two groups:

1. If your income source is your pension or investment you are required to pay  a flat rate of 5% income tax per annum. The first CYP 6,000 is exempt. In some circumstances, exemptions totalling up to CYP 4,000 per individual or CYP 8,000 per married couple apply.

2. If your income is from any other source you are required to pay 5% income tax per annum. The first CYP 2,000 (GBP 2350) is exempt.

Other Taxes

1)      Inheritance Tax: The Inheritance Tax was abolished in Cyprus as from January 1, 2000.

Other property-related costs:

There are some utility-related deposits that the property owner must pay for the service to be provided. They are for security reasons only and are refundable with termination of the service. These are as follows:

Electricity connection CYP 75.00

Water connection CYP 32.00

Telephone connection CYP 100.00

The basic utilities are payable in accordance with consumption and based on meter readings.

Duty Free Privileges

European Union nationals who permanently reside in the Republic of Cyprus and are using in their country for a period of at least six months, are allowed to import their vehicle to Cyprus duty free.

Europeans or Non-Europeans alike who permanently reside in Cyprus are allowed to import their furniture tax free provided that they are for personal use and are not brand new.

IMPORTANT

The information provided above should be used as a guideline only. It can vary with regard to individual circumstances. For further information, or advice contact us or a qualified legal advisor.