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 Legal Matters In Cyprus, unlike other countries, the process of registration is fairly simple. According to the law relating to the purchase of property by non-Cypriots, they are entitled to acquire an apartment, house or plot of land for the purpose of building, for an area of no more than 2,675m sq. Non-Cypriots require the authorization of the Council of Ministers for the purchase of property. All the payments for the purchase have to be declared upon arrival in Cyprus, or made by bank transaction so that the buyer will be able to withdraw money at any time in Cyprus without difficulty. According to Cyprus Law the contract exist in written form and it should be registered in Regional Land Registry Office within two months from the date of signature to guarantee the protection of the legal rights of the buyer in the event of non-observance of the contract (this means that the property belongs to the buyer and the salesman can not sell it again to someone else). From this moment the buyer can take credit from any Bank, according to Banking Law, with nominal interest of 9% per year. Provided that the buyer has the following documents – certificate of Central Bank, sanction of Ministerial Council, registration in the Land Registry office and fulfillment of all contractual obligations-the property passes to the buyer. Usually the process of Registration of the appropriate documents takes 6-12 months. The buyer is obliged to pay the stamp duty of 0,15% in each one thousand seven hundred and eight Euro, if the cost of the property does not exceed €170,860. If the property cost exceeds €170,860 the stamp duty is 0.2% of each €1,708. TRANSFER OF TITLE DEEDS The Title Deed of the property is a document in which details specifies the name of the owner. The buyer can transfer the property to his or the company’s name at any time he wishes. Such a transfer can be carried out after receiving the permission from the Council of Ministry. The following is spend for the transfer of the title deeds according to the cost of the property: Up to €85,430 - 3% €85,430-€170,860 – 5% €170,860 and more – 8% OTHER CHARGES Our company gives you the complete list of duties on operation of the property and its service it is such: Payment of water and electricity, depending on consumption. Payment for cleaning of territory depending on the orders of local authorities and it is about €85-€170 a year. The municipal taxes are not more than €34-€85 per year. In case of an apartment purchase in an apartment story-building, payments are established for thus by communal areas, such as the lift, ladder platforms, swimming pool and other. The sum of such payments depends on the type and size of the property. |
 Buying Property in Cyprus Steps to Follow:
The Ministry, under the Immovable Property Acquisition (Aliens) Law Cap.109, requires for the application the following: -Agreement (contract) - Approval by the Council of Ministers. - A document showing clearly that the payment of the property was made by foreign currency and finally -The title deed of the property. -Apply to the District Land Office for the transfer of the property to your name buyer from seller (the presence of both parties is required except where proxy is given to someone else) and the payment of the transfer fees and taxes to the land office. The application should consist of the following documents: -Copy of the approval of the Council of Ministers. -The certificate issued by the Central Bank -Receipts that all taxes of the property has been paid. - Registration certificate of the property. -Transfer Fees After the transfer of the property, the District Land Registry Office will charge transfer fees, based on the property’s value: For up to Euro€ 85.430 3% For Euro€85.431 - Euro€170.860 5% For Euro€170.862– and over 8% A stamp duty-at the rate of Euro €2.56 per Euro €1.708 up to Euro€170.860 and thereafter at the rate of Euro €3.42 per thousand seven hundred and eight – is due at the time of signing the Contract. The annual property ownership tax imposed by the movement is approximately Euro €102– 205 per year. The Municipal authorities’ annual property taxes for services rendered are at a rate of about Euro €34 – 50 per year. Property sales are subject to a capital gains tax at the rate of 20% on the gain. However the first Euro €17.086 is exempted and there is an indexation allowance. Inheritance Tax is not payable on property purchased by non-Cypriots when the beneficiary is not in Cyprus.
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 FAQ About Cyprus 1. Q. As a non-Cypriot what I am allowed to buy? A. Compared to many countries buying property in Cyprus is very easy. As a non-Cypriot you are entitled to buy a freehold property for your personal use either: a) An apartment or a house or b) A villa on a building site not exceeding 4000 sq.m or c) A piece of land not exceeding 4000 sq.m for the purpose of erecting a house within a reasonable time frame. 2. Q. What are the prices and terms of payment?
Banks can offer mortgage facilities in connection with the purchase of the property. The maximum amount that can be borrowed is the equivalent of 70% of the purchase price. Facilities cannot be arranged in Cyprus Pounds. A first mortgage will be required and the mortgage will be granted for 10 years maximum period. Normally the interest rate charged will be 2.5% above sterling rate or dollar prime rate. There is also an additional arrangement fee of 1% payable on the amount of the advance. 3. Q. Are there any Health insurance schemes in Cyprus? A. Yes there are several companies who operate schemes here. The level of cost, depends to a very large extent on the following factors:-Your age and medical condition-Level of cover required. 4. Q. Is there a double taxation relief-agreement between Cyprus and my country? A. Agreements exist with most countries of the European Union, as well as other countries throughout the world. These are listed bellow. Cyprus Double Taxation Treaties exist with: - Austria, Greece, Romania -Bulgaria, Hungary, Russia* -Canada, India, Slovakia -China, Ireland, Sweden -Czech Republic, Italy, Syria -Denmark, Kuwait, United States -France, Norway, Yugoslavia** -Germany, Poland N.B Out of the 26 treaties concluded by Cyprus, only 4 countries (Canada, France, UK and USA) have exclusions regarding Cyprus offshore entities. However, even these treaties can be used advantageously with some creative and careful tax planning. Further information can be obtained upon request. 5. Q. Is my pension subject to taxation? A. Yes. According to our tax system, you are obliged to declare your income from pensions to the tax authorities. There are two methods of choosing how your pension will be taxed. These are outlined below: 1st Method Euro€ 0-3.417 0% Euro €3.418 and above 5% flat rate 2nd Method Euro €0-10.250 0% Euro €10.251-15.378 20%- Euro €15.379-20.503 30% Euro €20.504 and above 40% flat rate These methods are based on cash transfers to Cyprus. 6. Q. Are there any hidden costs or charges for things such as legal? A. This depends to a very large extent on you the purchaser. The legal system in Cyprus is similar to the British legal system. 7. Q. Are there reputable International Schools in Cyprus? A. Yes, all major towns have reputable international schools. These schools offer diplomas equivalent to GCE\s for entry into British universities, and achieve high academic standards. 8. Q. How do I get transfer of the property purchased and what are the costs involved? A. Transfer of ownership takes place by a simple process of registration at the Land Registry Office and the issuing of a title deed after completion and delivery. This can be done either by a Power of Attorney to your Solicitor. A prerequisite for registration, in the case of non-Cypriots, is evidence that the property has been paid for with foreign exchange and approval by the Council of Ministers of Purchaser\s application to buy property in Cyprus. These formalities can be taken up by our company on behalf of our clients, free of charge, as part of the agreement. However, before the registration of the completed property the purchaser should pay the transfer fees, which are payable to the Land Registry office. The transfer fees range is show on the following table: Property Value Euro € Transfer Fees Accumulated Transfer Fees (€) Euro €0 -85.430 3% Euro €2.563 €85.431 – 170,860 5% Euro €6.834 €170.861 and above 8% Example: Property valued Euro €85.430 the purchaser should pay €2.563 and for €170.860 the amount of €6.834 9. Q. Do I have any Duty Free Privileges? A. These differ and the level of duty free privileges will depend, on your circumstances. As a guide, Personal effects, household goods and furniture can be imported free of any taxes by immigrant retirees, provided they are for personal use and have been used for a reasonable amount of time – approximately one year. There are no import duties on cars and for retired couples there is an additional concession of two duty free cars. 10.Q. What is the procedure for obtaining temporary residence in Cyprus? A. Temporary residence is easily obtained after the fulfillment of certain investment and immigration requirements. Applications forms are available from any of the local immigration offices. On completion of these forms, they should be returned to the immigration office with the following supporting documentation: - A certificate from a local bank confirming that the applicant holds an external account with that bank. This document should also indicate the current account balance. - Passport-Three passport photographs-€35.00 (application processing fee) -A copy of a sales contract, or a rental agreement. -Letter of guarantee of Euro €512 obtained from your Bank in Cyprus 11.Q. If I purchase a flat, what expenses would I have to pay? A. In Cyprus there are no rates as known in most countries in Europe. If a person has properties registered on his name where the market value exceeds Euro €170.860, there is a property tax on the excess value. The annual immovable property ownership tax imposed by the governments is levied on the market value of the property as of 1st January 1980 at the following rate: Purchase Price % Payable Cumulative Property Tax (Euro €) Euro €0-170.860 0.0% Euro €170 €170.861-427.150 2.0% Euro €512 €427.151-854.300 3.0% Euro €1,794 €854.301 and above 3.5% The owner apart from the expenses of telephone, water and electricity for which there are separate meters, has to meet a proportion of the common expenses e.g. for the lightening and cleaning of the common facilities and the maintenance of the lift (and of course the upkeep of a garden and a swimming pool where there is one). Common expenses are comparatively insignificant – for a 2-bedroom flat they do not normally exceed €43 Euro per month on average. Common expenses administration can be arranged by a clients committee. 12.Q. Can I take out insurance on my Property? A. Yes. There are companies who will issue cover for fire and earthquake damage. IMPORTANT The information provided above should be used as a guideline only, and can vary with regard to circumstances. For further information, or advice contact us via e-mail. |