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Our company has been involved in the property market in Cyprus, Spain and in the UK for the past 25 years. Now that Cyprus is a full member of the European Union the ability to move, settle and even open up business here has become much easier. The rules regarding investment including property has changed with ownership of more than one property available to would be investors. The majority of property available is "Freehold". The introduction of VAT on property in May of 2004 means that some developments/projects are subject to VAT, whilst some are not. This can represent a significant saving on your purchase. Why pay more than you need to? In January 2008 the Island will convert from the Cyprus Pound to the Euro. It is expected that in the run up to this period prices will firm considerably.
Buyers stay in Cyprus is FREE
Before trip
Legal Issues about the ownership of non-Cypriots residents:
Non Cypriots are permitted to buy either;
A) an apartment or,
B) a house on a building site not exceeding 3 donums (4,012.5 sq. metres) or
C) piece of land not exceeding 3 - 4 donums for the purpose of erecting a house within a reasonable time period.
The contract, after being agreed and signed, should be stamped at the tax office and then registered with the District Land Registry Office within sixty days from the contract date. This protects the buyer's rights to the property and provides additional safeguards. At any time after the purchase, the buyer may sell or dispose of the property at will, provided that he/she has a valid contract.
Transfer of ownership from vendor to purchaser is accomplished by a simple procedure through the Cyprus Land Registry Office, either by the buyer in person or by appointed third party with a Power of Attorney. In the case of a non-Cypriot, evidence of payment for the property with foreign exchange must be provided as a prerequisite for registration.
The transfer of title deed can be
affected once the Council of Ministers' permission is obtained and the Central
Bank of Cyprus confirms receipt of the foreign funds. Upon transfer of the
property and registration in the purchaser’s name, the District Land Registry
Office will charge Transfer Fees, which are based on the market value of the
property at the time of purchase, and are calculated as follows:
Value up to:
Euro 85,430.07 3%
Euro 85,430.08 – Euro 170,860.14 5%
Euro 170,860.15 - and over 8%
Stamp duty is due at the time of signing the contract. Stamp duty is levied at the rate of 2.56 Euro per 1,708.60 Euro up to 170,860.14 Euro and thereafter at the rate of 3.42 Euro per 1,708.60 Euro. The purchase contract must be stamped within 30 days of its dated signature; otherwise a fine will be imposed.
The annual immovable property ownership tax imposed by the government is approximately 102.52-205.03 Euro per year, depending on the value of the property. The Municipal authorities also levy an annual property tax at the rate of about 34.17-51.26 Euro per year. Other authorities may also impose a sewage tax of 34.17- 68.34 Euro, depending on the value of the property.
Should the purchaser decide to sell the property at a later date, Cyprus Law provides that the full amount paid for it in foreign exchange may be transferred abroad at the time of the re sale. The equivalent of the full purchase price and any increase in value of the property may be transferred immediately. Property sales in Cyprus are subject to Capital Gains Tax at the rate of 20% on the gain, however the first 17,086.01 Euro are tax-exempt.
Inheritance tax is not imposed.
Personal effects, household goods and furniture can be imported duty free by immigrant retirees, provided they are for personal use and have been used for a reasonable period of time - approximately one year. Also, there is no duty on a car, and retired couples enjoy the additional concession of two duty free cars.
Retirees drawing a pension are exempt from withholding taxes at source, and may be taxed at the nominal rate of about 5% or less depending on income. Additionally, Cyprus has Double Taxation treaties with many European and other countries, safeguarding its residents from paying tax in both countries.