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Acquisition
Under the Immovable
Property Acquisition Law, non-Cypriots, Companies and trusts are entitled to buy
freehold immovable properties, subject to prior permission by the Council of
Ministers. This must be submitted in writing by the non-Cypriot buyer after the
Contract of Sale is signed. The procedure is merely a formality, and permission
is normally granted more or less as a matter of course to all bona fide buyers
wishing to purchase a flat, house or piece of land for the erection of a house
not exceeding 3 donums (4,014sqm). This and other matters can easily be carried
out for you by a solicitor.
Once permission is granted and the property
is registered in the buyer's name, there is no restriction on selling the
property or disposing of it by will.
Exchange Control
Now that Cyprus is
part of the E.U., exchange control restrictions have been abolished both in
respect of buying and selling immovable property.
Mortgage & Finance
All commercial
banks in Cyprus are authorised to offer mortgage facilities to assist in the
purchase of property. The loan will be in foreign currency and will be to a
maximum of 70% of the value of the property, with a repayment period of usually
not more than 10 years.
Contract of Sale of Immovable
Property
Under Cypriot Law, such contracts must be in writing.
It is also advisable that Contracts of Sale be deposited at the relevant
District Lands Office within 2 months of signing the contract, so that the
buyer's right to pursue the remedy of specific performance in the event of
breach, are protected. Ownership in Cyprus is denoted by title deeds issued by
the District Land Office. Therefore, all contracts must provide for the transfer
and registration of the property in the buyer's name and to ensure title deeds
are obtained.
Transfer of the Title Deed
Once the
Council of Ministries has granted permission to the buyer's application to
acquire property, transfer of ownership can be done. Transfer tax fees based on
the value of the property, are payable by the buyer and are as follows:
Value of property in Cyprus Pounds (CYP)
Transfer
fee %
Up to: CYP 50,000
3%
From: CYP 50,001 -
100,000
5%
Over: CYP 100,000
8%
For example, a property purchased by an individual at CYP
90,000; the transfer fee would be:
The first CYP 50,000 x 3% = CYP
1,500
The next CYP 40,000 x 5% = CYP 2,000
Total Transfer Tax Fee Due
= CYP 3,500
However, should the purchase be made in joint names (provided
the prices is more than CYP 50,000), the transfer tax would then be as
follows:
For example, on a property purchased at CYP 90,000 the transfer
tax would be:
The first CYP 45,000 x 3% = CYP 1,350
The next CYP
45,000 x 3% = CYP 1,350
Total Transfer Tax Fee Due = CYP 2,700
Immovable Property Tax
The annual
immovable property ownership tax is based upon the market value of the property
in 1980, which is much lower than current market values. So for many properties
in Cyprus, there is no immovable tax due.
Value of property in
Cyprus Pounds (CYP)
Annual Property Tax
Up to: CYP
100,000
Exempt
From: CYP 100,001 - 250,000 2.5%
From: CYP
250,001 - 500,000 3.5%
Over:
CYP 500,000
4%
Stamp Duty
A one-off duty is levied on
the purchase of property in Cyprus and rates are dependant on the contractual
purchase amounts. The amount is payable to the Tax Authorities and should be
paid within 30 days of signing the contract.
Value of property
in Cyprus Pounds (CYP)Stamp
Duty
Up to: CYP 100,000 0.15%
Over: CYP
100,000 0.20%
Inheritance Tax
This was abolished as
of 1st January 2000.
Local Authority Tax
This tax
covers the cost of refuse disposal, street lighting etc. and ranges from
approximately CYP 30.00 - 100.00 per annum, dependent on the size of your
property.
Basic utilities such as electricity, water and telephone are
payable direct to the relevant suppliers and charges are based on meter
readings.
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