What you need to know about buying a property in Cyprus?
SALE AND PURCHASE OF PROPERTY IN CYPRUS
The law governing the acquisition of immovable property in Cyprus by foreigners is the Cypriot Acquisition of Immovable Property (Foreigners) Law, Cap. 109 of the Laws of Cyprus (hereinafter referred to as “the Law”), as amended from time to time.
Section 2 of the Law – Definitions
It should first be noted that for the purposes of the Law, “foreigner” means a person who is not a citizen of the Republic and includes a company controlled by foreigners, a foreign company and a trust created for the benefit of a foreigner.
But does not include the following:
A foreigner Cypriot;
A foreigner wife of a citizen of the Republic of Cyprus who is not divorced from her husband by decision of a competent court;
European Union National
Subject to a recent amendment of the above Law a Cyprus Company, regardless of who the shareholder is, does not fall within the above definition and can buy any property in Cyprus. For example a Cyprus Company with a foreigner shareholder can buy any kind and as many immovable properties in Cyprus without the need of the permission of the Council of Ministers.
Contracts must be stamped within 30 days of signing a sales contract otherwise a penalty is charged and added to the cost of the stamps. Contracts are stamped at the Tax Office. The contract must then be lodged with the Land Registry Office within 60 days of signing, failure to do so will result in the right to lodge being lost, and the contract can then never be lodged.
The stamp duty is calculated as follows:
€2,57 per thousand for property purchase prices up to €170,860
€3,42 per thousand for the part of the property purchase price exceeding €170,860
The stamp duty must be paid within 30days of signing the contract to avoid paying a penalty.
Registration of immovable property with the Land Registry in Cyprus;
When the permit and/or license for the acquisition of immovable property in Cyprus is granted to a foreigner, he/she must then visit the offices of the Land Registry in the district in which the immovable property concerned is located, and request that his/her ownership of the land, be recorder in the relevant Register.
The foreigner shall then be provided with the title deed to the property and this shall be the evidence of his/her ownership of the immovable property concerned.
The transfer fees payable for the registration of the immovable property in the name of the applicant purchaser are as follows:
3% on purchase prices up to €85,430
5% on the next €85,430
8% on the remaining amount
Two purchasers buying one property will pay less in transfer fees as the first €85,430 per person is 3% and the second €85,430 per person is 3% and the second €85,430 per person is 5%.
- a) Inheritance Tax: There is no Inheritance Tax in Cyprusb) Capital Gains Tax: The capital gains tax is the tax imposed on the net profit proceeds from the sale. Net Profit means the profit of the sale after deducting the following:
€17086 per person for first sale or €85430 when legally residing in the Property for more than 5 years
Registered Estate Agents fees
Any extras done on the Property
Inflation etc.c) VAT: For new Properties (that is for properties where the application for Town Planning Permission was filed after the 1/5/2004) VAT is imposed.