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CYPRUS

Property Law

Cyprus Property Lawyers

Cyprus is an excellent place to live and work. It combines the benefits of an attractive island resort and at the same time an excellent office base. The location of Cyprus which is at the meeting point of Europe, Asia and Africa gives the businessman the opportunity to another country easily, quickly and cheaply.

Cyprus is also the country of selection for retirees as it is considered an ideal and attractive place to acquire property due to its excellent climate and weather.

We pride ourselves on making your property transaction run as smoothly and as stress free as possible. Our property lawyers offer clear advice and strong commitment to enable an efficient and secure real estate transaction.

Our Law Firm offers a broad range of residential and commercial property services, which include:

  • Buying and selling of Cyprus real estate.
  • Real Estate construction.
  • Cyprus commercial leases.
  • Landlord and Tenant issues.
  • Planning disputes.
  • Compulsory purchase orders.
  • Residential developments.
  • Estate management.
  • Commercial developments.
  • Title deed disputes.
  • Property auctions.
  • Property litigation and enforcement.

Sale of Cyprus Property

We undertake all matters relating to sale of real estate in Cyprus, whether or not the seller is located in Cyprus or abroad, including:

  • Preparation of Power of Attorney(s) were owner(s) are not residing in Cyprus.
  • Land Registry Search (for any encumbrances and/or mortgages and/or prohibitions which may be registered οn the property, urban planning permit, building permit etc).
  • Drafting, negotiating and/or reviewing the Contract of Sale.
  • Undertaking the payment of debts, utilities and taxes. (When selling a property any outstanding amounts for debts, utilities and taxes must be cleared. These amounts will be communicated to you prior to the sale of the property.)
  • Completion of Conveyancing.

What do I need to pay when selling property in Cyprus?

The following is an indicative list of the things you will have to pay when selling your property in Cyprus:

  • Capital Gains Tax (outlined below).
  • Any outstanding mortgage.
  • Balances to utility authorities, local authority taxes (e.g. refuse and sewage) and management committee (if in a building block or project with communal areas).
  • Agent’s commission which usually ranges from 3%-5%.
  • Legal fees which are usually 1% of sale value and disbursements (e.g. for the certification of documents).

In addition, the law provides that every seller of property must deliver an Energy Efficiency Certificate but some buyers don’t insist on this.

Cyprus Capital Gains Tax on Sale of Immovable Property

Capital gains tax applies on the profit made on the sale of a property at the rate of 20%. This is calculated on the gains from the disposal of immovable property in Cyprus, subtracting the original cost and additional expenses from the proceeds of the sale. Both inflation and allowable expenses are also factored into the final amount of taxable gains.

For example, the cost of acquisition used for the calculation of the profit also includes any payments made for the improvement of the property or for any additions on the property as well as any interest paid for the acquisition.

In cases of inherited property, the original cost will be that which is shown on the title deed as at 1st January 1980. This must be adjusted to include the increase from the date of acquisition, up to the date of disposal. This increase can be estimated via Cyprus consumer price index.

Capital Gains Tax Exceptions

Individuals are entitled to certain exemptions from capital gains tax, however, these are one lifetime allowances and apply to each registered owner.

The first exemption of €17,086 occurs if the gains are obtained from the disposal of any property.

The second exemption of €85,430 occurs if the gains are obtained from disposal of primary residence. The second exemption applies only if the property in question was owned and used as the primary residence for a period of at least 5 years.

The third exemption of €25,629 relates to the agricultural land sold by the farmers.

The above allowances are not available separately. An individual claiming a combination of the above allowances in only allowed a maximum allowance of €85,430.

Estate agent fees and legal fees are also deducted when calculating the total Capital Gains Tax to be paid.

In addition to the Capital Gains Tax, as of February 2021, a new 0.4% tax on the sales of immovable property will be imposed to support Greek Cypriot refugees and paid by the seller.

Cyprus Property Lawyers

Purchasing a Property in Cyprus

Buying a property is an exciting time but it can be overwhelming, especially if you’re a first-time buyer.

In Cyprus, the Immovable Property Law, Cap.224, regulates all matters relating to property registration.

There are no restrictions for  EU citizens towards buying Property in Cyprus. The same applies to legal entities headquartered in Cyprus or any other European member state.

Non-EU citizens are also entitled to own properties in Cyprus after obtaining approval from the Council of Ministers and signing a Sale Agreement.

The most crucial step before a purchasing property in Cyprus is undertaking the relevant due diligence. It is crucial to cross-check whether the property is clean from any encumbrances, whether it has a clean title deed and if it complies with any planning permissions and building permits.

Burdens on the property and any non-compliance issues could prevent the issuance and transfer of the respective title deed.

Our Cyprus Law Firm can assist you by providing a full spectrum of real estate legal services and the necessary legal assistance and guidance in purchasing real estate property in Cyprus.

What do I need to pay when buying property in Cyprus?

The following is an indicative list of the things you will have to pay when buying property in Cyprus:

  • Purchase Price.
  • Transfer Fees, unless the property is new, in which case VAT will be paid instead of Transfer Fees (outlined below).
  • Stamp Duty & Sale Agreement Deposit Fees.
  • Legal Fees and Disbursements.
  • Cost of connection of utilities.

Cyprus Property Transfer Fees

Cyprus property transfer fees are payable by the purchaser and are due when the title deeds are issued and transferred to his name.  It is important to note however, that there is currently a 50% discount on the below rates and transfer fees are not chargeable at all if VAT has been paid. Typically, VAT is payable on new properties.

If there is more than one buyer, the purchase price is divided by the number of buyers and the transfer fees apply for each calculated for each buyer. Each of the buyers then has a 50% discount on the transfer fees attributed to it.

Property Value (€)

Transfer Fees (%)

Up to 85,430

3

85,430 – 170,860

5

Over 170,860

8

For example if the purchase price is €200,000 the transfer fees are calculated as follows:

Property Value (€) Transfer Fees (€)

The first 85,430 @ 3%

2,563

The next 85,430 @ 5%

4,272

The last 29,140 @ 8%

2,331

Total Transfer fees

€9,166

A tip for saving money on transfer fees: Should the purchase be made in joint names, the effective value for calculation is halved.

For example if the purchase price is €200,000 (as above) and the purchase is made in joint names you can save £2,582. The transfer fees are calculated as follows:

€200.000 / 2 = €100,000 for each purchaser

Property Value (€) Purchaser A Purchaser B Total Transfer Fees (€)
First 85,430 @3%

2,563

2,563

5,126

Next 14,570 @5%

729

729

1,458

 

 

€6,584

Cyprus Immovable Property Stamp Duty

A stamp duty of 0,15% (€1,50 per €1,000) is levied on contracts with a value of up to €170,860. For any amounts thereafter, the rate is 0,2% (€2 per €1,000). The stamp duty is payable by the purchaser within 30 days of signing the contract.

Sale Agreement Deposit Fees

A fixed €50 fee is payable to the District Land Registry Office when depositing the Sale Agreement with the Land Registry Office.

Cyprus Immovable Property Value Added Tax (VAT)

Value Added Tax (VAT) at the rate of 19% applies to the purchase price of new properties only. However, this may be reduced to 5% provided that the property is to be used as the primary and permanent residence of the applicant under the following conditions:

  • Submission of an application with the relevant supporting documents;
  • The property must be used as the main primary and permanent place of residence; and,
  • The applicant does not possess any other property which is used as the primary residence in the Republic of Cyprus.

The reduced rate of 5% is applied only on the first 200m2 and the area exceeding the first 200m2 bears standard VAT rate of 19%.

Cyprus Real Estate Law

See how our lawyers can help you with Real Estate in Cyprus.