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General Information

Buying a Property In Cyprus

Cyprus has one of the most advanced and effective Land Registry systems in the world and the legal system in Cyprus is mainly based on the Anglo - Saxon legal system. The contracts can be written in the English language, especially when one of the parties is a foreigner.

Those who are interested in buying property in Cyprus will find below some useful information about the procedures, the transfer fees, taxes and other matters.

The Procedure In Brief

According to Cyprus Law the purchasers need a written contract of sale, which will be stamped and lodged at the Land Registry Office for Specific Performance purposes. This gives the purchasers the security of a legal charge over the property, which will remain up until the time of transfer of the title deeds to them. The purchasers must lodge the contract of sale at the Land Registry Office within two months from the date of signing. Otherwise the purchasers will not be able to specifically enforce the transfer of the property to them through the Court, but will only have a claim in damages for breach of contract, in the even that the Vendor fails to transfer title to them.

Non-European Citizens and Europeans, if they are not residents of Cyprus, must apply to the Ministry of Interior for permission to acquire immovable property in Cyprus. As soon as the above permissions have been obtained and as soon as a separate title deed has been issued by the Land Registry Office, the Purchasers will then be in a position to accept transfer of the title deed into their names.

Solicitors Services And Fees

Solicitors vary in the services they provide their clients with. When engaging a solicitor it is advisable to check what services they provide in relation to your house purchase and the costs.

Your solicitor should;

Draw up and advise you of the conditions of the Contract of Sale.
Lodge the Contract of Sale in Land Registry for Specific Performance.
Make an Application to the Council of Ministers on your behalf.
Advise you and prepare a Will (this need only cover your property in Cyprus) for each purchaser.
Check with Land Registry for any mortgages on the land.
Check that the title deeds are in the name of the person you are purchasing from.

If you are not permanently living in Cyprus it may be prudent to give your solicitor power of attorney to act and sign on your behalf. Of course this is always subject to you being consulted prior and agreeing to the proposal or action to be taken. Usually the solicitor will require confirmation of your acceptance of the proposal in writing, by e mail or fax is acceptable.

Your lawyer can also help you to open a bank account and obtain a mortgage.

Legal fees for the purchase of property are approximately €2,000. You should always ask for an approximation of fees and costs in relation to the services you will require.

Stamp Duty

The contract of sale must be duly stamped and the stamp duty is 1.5c per €1,000 for the first €170,860 of the purchase price and 2c per €1,000 for the remaining balance. The stamp duty should be paid within 30 days of signing of the contract.

Transfer Fees

On transfer of the title deed into the name of the Purchaser, the Purchaser must pay transfer fees to the Land Registry Office.

Transfer fee rates are as follows:

Value of Property (€ Euros)
up to 85,430	3%
between 85,431 - 170,860	5%
over 170,861	8%

However, if the purchase is made in joint names the effective value for calculation is halved.

As always it is advisable to check the rates and % at the time of making your purchase , these tables should only be used as a guide line.

Immovable Property Tax

The immovable property tax is based upon the value of the property on the 1st of January 1980. If the value of the property at that time exceeds €170,860 then the registered owner of the property must pay immovable property tax according to the following scales:

Value of Property at 01/01/1980(Euros)	Annual property tax
up to 170,860	Exempt
170,861 - 427,150	2,5 0/00
427,151 - 854,300	3,5 0/00
Over 854,301	4,0 0/00

Bank Loans To Non - Residents For Purchase Of Property

The commercial Banks in Cyprus are in a position to examine requests for loan facilities to non-residents for the purchase of immovable property in Cyprus. The loan repayments can be made in any foreign currency or local currency

Capital Gains Tax

Capital gains tax is payable on the profit from a disposal of immovable property. Capital gains tax is imposed at the rate of 20% on the gain after any personal allowances and inflation calculations have been deducted. It is advisable to check at the time the current allowance each person is entitled to.

Wills

It is preferable to make a will in Cyprus to cover movable and immovable property in Cyprus. The will can be worded in such a way as to deal with Cyprus property only so as not to affect either property in other countries of any wills already existing in other countries.

A will made in another country referring to Cyprus property may be valid in Cyprus, but is should be noted that on the death of the testator the Grant of Probate must first be obtained in the country where the will was made and then "resealed" in the Cyprus Courts, which inevitably leads to excessive delays and additional expense.

There is no Inheritance Tax in Cyprus.