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BUYING PROPERTY IN CYPRUS

Quality of life in Cyprus, along with the standard of living makes it a very attractive proposition for those looking for an alternative place to live permanently or to invest in a holiday home.
The Island is a place of contrasts - towns with the latest technology and entertainment or villages where life has changed little over the centuries. The cost of living is relatively low and general services compare favorably to the prices in the United Kingdom. Eating out is an experience - take your choice - small family-run tavernas where you can taste Cypriot delicacies at very little cost to 5-star International venues where you can pay as much as you would in a top-of-the-range London restaurant.


BUYING PROPERTY:

EU citizens have no restrictions on how many properties or pieces of land they can purchase freehold.

Non-EU citizens are entitled to freehold ownership of one villa, apartment or piece of land to a maximum size of 4000 m2. Property in Cyprus is Freehold as the Leasehold system is virtually unknown.

Acquiring Title Deeds:

With the signing of the Contract of Sale and payment of the deposit, the Contract is registered at the Land Registry Office. This procedure protects the purchaser’s ownership rights until the title deeds are issued as the contract cannot be withdrawn by anyone and therefore the property cannot be leased, sold or mortgaged. This status can only be altered by the purchasers themselves.

The transfer of ownership from the vendor to the purchaser is done at the Land Registry Office either by the buyer in person or by an appointed power of attorney.

Property Transfer Fees:

Transfer Fees are payable to the Land Registry Office. The amount is based on a sliding scale as shown below. The fee is paid by the purchaser and is due when the Title Deeds are transferred to his name.


 
Value of Property Rate of Transfer Fee %
Up to ˆ 85,430 3%
ˆ 85,432 - ˆ 170,860 5%
Over ˆ 170,862 8%


Stamp Duty:


A Stamp Duty of
ˆ1.5 per thousand is required on purchase contracts with a value of up to ˆ170,860. The rate for amounts in excess of this is ˆ2 per thousand. The Duty is due within 30 days of signing the Contract and is payable by the purchaser.


Immovable Property Tax:

The registered owner of a property in Cyprus is liable for this annual tax which is based on the value of his property. Property valued at up to ˆ170,860 is exempt from tax. For property exceeding that value the rates are as follows:

ˆ170,862– ˆ427,150  ˆ2.00 per thousand
ˆ427,152–ˆ854,301   ˆ3.00 per thousand
Over
ˆ854,302          ˆ3.50 per thousand


Sale of Property:

You can sell your property at any time with no restrictions. If you are a non-resident alien and you purchase a holiday home with foreign currency you can take out in foreign currency the proceeds of sale.


Capital Gains Tax:

Gains from the sale of immovable property in Cyprus are, as a rule, at the rate of 20%. However generous exemptions are provided for: i.e. net capital gains up to ˆ85,430 earned from the disposal of a residence home are tax exempt.


Local Authority Taxes:

Property taxes charged by the local authority are in the range of ˆ50 - ˆ200 per annum, dependent upon the size of the property. This tax covers the cost for street lighting, garbage disposal etc.


Value Added Tax - VAT:

VAT at a rate of 15% is charge on the sale price of each property. It is possible to claim back most of the VAT you have paid on a property if you are a Cypriot or a European Union citizen permanently residing in the Republic of Cyprus and you are using the buying property in Cyprus as a permanent residence. The buying property must be new and used for the first time as residence. The total covered area of the buying property must not exceed 250m2.

(For more information please visit www.cyprus.gov.cy )


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