Property in Cyprus is registered on a land registry, similar to that in the United Kingdom; therefore, the purchase process generally follows that of the United Kingdom but with differences. 

Firstly, a preliminary contract is signed. This binds both the vendor and the purchaser to buy and sell the property on terms and conditions that have been mutually agreed. This is subject to the purchaser being able to receive good title to the property and obtaining the necessary permits from the Cypriot government. 

At this stage, a deposit is lodged with a Lawyer or a Notary. The purchasers Lawyer will now carry out the searches at the District Land Registry to ensure that the vendor of the property is indeed, the owner and ensures that the purchaser obtains good title to the property in question. 

Non-Cypriot citizens require permission from the Council of Ministers/District Office department to purchase property in Cyprus. If this has not yet been obtained then the purchaser should now make the necessary applications to the Council of Ministers/District Office for the permission. This procedure may take from six to nine months to be granted. Without the permission from the Council of Ministers/District Office, the Title Deeds of the property cannot be made available to the purchaser. 

The final contract is only entered into when the searches have proved satisfactory. The contract of sale is then stamped and lodged with the Land Registry within one calendar month of the contract of sale being signed by all parties, which will prevent the vendor from selling the property for a second time whilst the property is pending completion and to avoid a possible fine from the Government for the delay of lodging the contract of sale at the Land Registry. 

Application is made at the Central Bank at this time for the necessary permit for the transfer of purchase money. This application is not necessary if both the purchaser and the vendors are foreigners. 

The transfer of the title deed is then completed, the full price is then paid and the vendor gives vacant possession. 

PURCHASE EXPENSES PAYABLE.

Upon signing a contract, the Purchaser is liable to pay stamp duty that amounts to 1.5 per thousand of a purchase price up to CY£100.000 and then at a rate of 2.0 per thousand on any purchase price in excess of CY£100.000. 

Transfer fees are payable at the Land Registry Department when the ownership of the property is transferred. This is on a sliding scale, ranging from 3% to 8% depending upon the value of the property, i.e., up to CY£50,000(3%), from CY£50,000 to CY£100,000(5%) and over CY£100,000(8%). Couples who jointly place their names for the property ownership/registration will pay less for transfer fees, as follows: - example based on a property value up to CY£100,000, the transfer fee will be 3% on £50.000 for one spouse and 3% on CY£50,000 for the other spouse which equals CY£100,000. 

Application to the Council of Ministers/District Office fee costs around CY£250-300. 

Lawyer’s fees will vary according to the amount of service carried out by your Lawyer. The Lawyer’s fees are normally payable by the purchaser of the immoveable property in question. Real estate agents fees are normally payable by the vendor of the immoveable property in question. Further fees will be charged according to the amount of service carried out by your appointed Lawyer and Real Estate Agent. 

MORTGAGES. 

Mortgage facilities have recently become more available for the purchase of property in Cyprus. You can generally borrow up to 70% of the lower valuation and purchase price, for a term of 5 to 15 years. The minimum loan is usually CY£25,000 and the rate of interest is presently 2% above UK base rates and is subject to variation. For mortgage facilities and details on loans, it is strongly advised to contact the Bank. 

Alternatively many developers offer payment terms that are comparable to mortgages. In these circumstances one third is usually required at the preliminary contract stage, another position is required at the possession stage and the rest paid in monthly installments. 

CONDITIONS OF PURCHASE. 

As stated previously, non-Cypriots must obtain permission from the Council of Ministers/District Office before purchasing property. For individuals, this will be granted, as a rule, bone fide cases where individuals wish to acquire an apartment, a house or piece of land for the erection of a house intended for residency, or regular use as a holiday home. Individuals cannot obtain permission for more than one property. In the case of acquiring land with a view to building, the area allowed will usually be approximately two thirds of one acre. Permission will normally be granted to a company for the acquisition of property, provided that it is for its own use. Offshore companies could therefore, acquire property within the above limits. 

Generally, the permission will not be granted if the property is to be used for letting to others, commercial exploitation or speculation. On a sale of a property the current policy is to allow immediate repatriation of a sum equivalent to the amount of the original purchase value of property. Any profit can be exported at the rate of CY£10,000 per calendar year, plus any interest. 

INDIVIDUAL ALLOWANCES AND CAPITAL GAINS TAX.

 Capital gains tax is levied at a rate of 20% on gains. Individual lifetime allowances are as follows: The first C£10.000 of gains arising from the disposal of any property. The first C£15.000 of gains arising from the disposal of agricultural land by the farmer (subject to certain conditions). The first C£50.000 of gains arising from the disposal of a house used by the owner for its own habitation (subject to certain conditions). The above allowances are not available separately. An individual claiming a combination of the above allowances is only allowed a maximum allowance of C£50.000.Cyprus residents and companies registered in Cyprus are subject to Capital Gains Tax when disposing their property, wherever it is, in Cyprus or overseas. Non-residents are only taxed when selling property situated in Cyprus. They can be totally exempt from this tax if they can prove that they acquired the property in question by importing foreign currency between 1 August 1980 and 13 July 1990. 

IMMOVABLE PROPERTY TAX. 

The registered owner of the immovable property is liable to an annual immovable property tax calculated on the market value of the property as at 1st January 1980.

The property value up to CY£100,000 = zero per thousand,

CY£100,101 - £250,000 = 2.5 per thousand,

CY£250,001 - £500,000 = 3.5 per thousand,

and property value amount over CY£500,001 = 4 per thousand. 

WILLS AND INHERITANCE. 

Property owners in Cyprus are advised to make a will in Cyprus to cover their Cypriot estate. A Cypriot will speed up the process of obtaining probate in Cyprus. 

Inheritance Tax is payable on a Cypriot estate and rates are on a sliding scale depending upon the value of the estate. Full professional advice should be obtained with regard to making a Cypriot Will and Inheritance Tax planning. 

The information mentioned above acts as a basic guide purely for information purposes only. This information can and may vary or be subject to changes that are set by the Laws Of The Republic Of Cyprus. If you require any advice regarding the purchase of property in Cyprus, we would advice you to contact a reputable registered Real Estate Agent. For financial advice, it would be in your best interest to contact a local Bank. The Real Estate Agent can also recommend for you an advocate for your legal queries.