Legal Info

Procedures and Costs

Purchasing or Selling a Property in Cyprus

Legal System

The legal system on the island is based on the British and Greek legal systems, as is the Land Registry, which is considered to be one of the most advanced and reliable systems in the world making purchasers more secure with regards to their Title Deeds than they may be in another country.

Purchase Procedure

 Upon choosing your ideal property you will be asked to pay an initial deposit to hold your property from  2.000 CYP (depending on the developer). Your contract will then be drawn up by your chosen solicitor and you will be asked to pay another deposit of 30% (again dependent upon the developer) within 30 days of signing the contract.

Having signed a "Contract of Sale" for your property , as a formal procedure, it will be necessary to make an application to the Authorities of the Republic of Cyprus to grant that a non-Cypriot may acquire immovable property  (all this should be undertaken by your solicitor but check with them in advance). This procedure may take up to 3 months, but in the meantime , there is no restriction in taking possession of the property. The main information required for completing the application is:

• Personal details of the applicant(s) and their financial standing
• Particulars of the property
• Particulars of the present owner, the "Contract of Sale" & terms of payment
• The way of acquisition, i.e., whether Freehold, Long Lease, by Share etc.

Once the "Contract of Sale" is signed and a deposit paid, the Contract is registered at the Land Registry. The Contract is then in the hands of the Land Registry and therefore cannot be leased, sold, transferred or mortgaged. This procedure protects the purchaser's ownership rights until the Title Deeds are issued and transferred into his name.

Other Costs Involved When Purchasing A Property

As well as paying an initial deposit and a 30% deposit other costs need to be considered when purchasing a property:

Transfer Fee

Real Estate Transfer fees are imposed by the Lands Registry in order to transfer FREEHOLD ownership to the name of the purchaser. The transfer fees are due for payment when the transfer of the title deed in the name of the purchaser takes place. The Purchaser is solely responsible for the payment of the transfer fees. The rates are on a graduated scale.

Value of property (CYP)	Transfer fee rate (%)
up to 50,000	3
from 50,001 to 100,000	5
from 100.001 and over	8

If the property is in joint names e.g. of a couple (husband and wife) or two individuals, then the purchase value is divided into two parts which results in reduced transfer fees.
The following example clearly illustrates this For property purchased for CYP 70.000 in one name, the fees payable are CYP 2.500.

For Property in one name
Up to CYP 50.000	3%	= CYP 1.500
The remaining CYP 20.000	5%	= CYP 1.000
Total fees payable		= CYP 2.500

For property purchased for CYP 70.000 in the names of two persons, the fees payable are CYP 2.100.

For property in the names of two persons
First CYP 35.000	3%	= 1.050 (Share of husband)
Second CYP 35.000	3%	= CYP 1.050 (share of wife)
Total fees payable		= CYP 2.100

Stamp Duty

The purchaser is liable for the once only payment of stamp duty at the rate of 1.5 per thousend of the value up to 100.000 CYP. Thereafter the rate becomes 2.0 per thousand. This should be paid within 30 days of signing the contract.  (This is again something your solicitor can do for you, check with them they are able to do it).

Stamp Duty Costs

Market Value of Property                             Stamp Duty
Up to CYP 100.000	0.15%	(150)
Over CYP 100.000	0.2%	(200)

Solicitors Fees

These vary in price starting from approximately 800 CYP upwards dependent on solicitor, type of property etc.

  Other Costs Involved After Purchasing  A Property

Immovable Property Tax

The annual immovable property tax is imposed on the market value of the property as at 1st January 1980 and applies to the immovable property owned by the taxpayer on 1st January each year.

Market value of property (1/1/1980)(CYP)	Annual Property tax (‰)
up to 100,000	exempt
100,001 to 250,000	2.5
250,001 to 500,000	3.5
over 500,000	4.0

Amenities

Electricity connection CYP 75.00

Water connection CYP 50.00

Telephone connection CYP 100.00

The above amounts are deposits for security reasons only and are refundable with termination of the service.

Local Authority Rates

These are between CYP 50-150 per annum, depending upon the size of the property. This tax is for refuse collection, sewerage, street lighting etc. The basic utilities are payable individually in accordance with consumption and based on meter reading.

Estate Duty

Estate Duty tax has been abolished as from the first of January 2000 (Statute No.78(1)/2000).

Communal Charges

When purchasing on a development there maybe communal charges for the upkeep of the pool and communal areas, these can vary from 25 CYP per month upwards depending on size pf development, developer, etc.

Mortgage and Finance

All commercial banks in Cyprus offer mortgage facilities. Loans are in foreign and local currency and the amounts range from 60-80% of the value of property , with repayment periods up to 30 years (age related and dependent upon lender). Other schemes available include long-term in-house finance schemes and easy terms of payments.

 Selling Property in Cyprus

A qualified valuer should be appointed who will assist in determining the value of your property (the Cyprus Association of Surveyors can be contacted for a recommendation).

Any outstanding property taxes must have been paid and a certificate obtained from the Inland Revenue.

Capital Gains Tax

On gains from disposal of immovable property situated in Cyprus, capital gains tax will be imposed at the rate of 20% with the first CYP10.000 being exempt for each person. The gain is the difference between the sales proceeds and the original cost of the property. In the case of a property which was purchased before 1/1/1980, the gains are the difference between the sales proceeds and the market value of the property as of 1/1/1980. The seller is entitled to a further allowance regarding the transfer fees paid, inflation rate per year and the cost of any additions made to the house. Gains from the disposal of a private residence are exempt up to CYP 50.000 in total if the owner resides in it continuously for at least five years prior to disposal. Gains from the disposal of a dwelling house are exempt up to CYP 50.000 in total if the owner resides in it continuously for at least five years prior to disposal. Stamp Duty on Contracts

first CYP 100 000	1.5‰	CYP 150
next CYP 50 000	2.0‰	CYP 100
	Total	CYP 250

The sale proceeds can be repatriated immidiately, including any amounts spent on improvements and/or additions to the property, which have been paid for with imported foreign currency. Profits can also be repatriated, but note should be taken of the exchange rate at the time of transfer of funds. There is an indexation allowance and a further allowance regarding the trasfer fees paid.