The Purchase Process and Associated Costs
The system for purchasing property in Cyprus is relatively straightforward and there are legal safeguards in place which protect your rights as a purchaser. We have vast experience and knowledge of the industry and every client is treated individually and you are taken through each stage step by step so you can rest assured you are in safe hands.


Property Ownership
As a non-Cypriot, you are entitled to freehold ownership of a villa, apartment or piece of land up to 3 donums (4,014m2). However, once Cyprus joins the EU in May 2004 this is likely to change in favour of non-Cypriots enabling an unlimited entitlement to freehold ownership of property or land.

Note: EU Members and companies can acquire and invest in any type of property and will be treated as Cypriots after May 2007


Paying for Cyprus Property
You are required to pay for your property in foreign currency. Personal cheques, bank drafts and telex transfers are all acceptable. We can put you in touch with the right professionals to ensure you get the best advice regarding money transfers and that all the necessary certificates are obtained from the Central Bank of Cyprus.


Approval of the Council of Ministers
Having signed a contract of sale for your property, it will be necessary to make an application to the Council of Ministers to grant its approval for a non-Cypriot to acquire immovable property. This is a routine procedure and your solicitor will assist in the processing and monitoring of your application.


Legal Safeguards
The Cyprus legal system is largely based on the UK system and provides many safeguards to protect your rights as a purchaser. For example, the land law on the island provides a safe and effective legal instrument called “Specific Performance”. This recognises a purchaser who lodges their purchase agreement with the Land Registry (register within 60 days of signing the agreement). As the legal purchaser you are entitled to register the property in your name once you have secured the Council of Ministers permit and payment of the purchase price is completed.


Property Transfer Fees/Land Registry
This is a required tax in order to transfer the freehold property ownership into your name and the Cypriot Land Registry is probably one of the most advanced and reliable systems in the world. Fees charged are based on a properties market value, (at the date of purchase), and is charged at a rate between 3-8% This is a one-off fee payable to the Land Registry Office and usually takes place at completion. The transfer of title can be effected once the Council of Ministers’ permission is obtained and the Central Bank of Cyprus confirms receipt of the foreign funds.

Value of Property	Transfer Fee rate
Up to CY£50,000	3%
CY£50,001 - CY£100,000	5%
Over CY£100,000	8%

Example (purchase price of CY£120,000)

1st CY£50,000	@3% CY£1,500
2nd CY£50,000	@5% CY£2,500
3rd CY£20,000	@8% CY£1,600
TOTAL	CY£5,600

However, if the property is purchased jointly by a couple the property purchase price is split into two equal parts which is beneficial to the purchasers:

1st CY£50,000 X2	@3% CY£3,000
2nd CY£10,000 X2	@5% CY£1,000
TOTAL	CY£5,400

Stamp Duty
The purchaser is liable for the payment of stamp duty at the rate of CY£1.50 (0.15%) per thousand (CY£1000,00) up to the value of CY£100,000 and thereafter the rate is CY£2.00 (0.20%) per thousand.

Example: On a property purchased for CY£120,000

purchased for CY£120,000	Cost of stamp duty
Up to CY£100,000 (0.15%)	@CY£1.50 = CY£150.00
Remainder CY£20,000 (0.20%)	@CY£2.00 = CY£ 40.00
TOTAL	CY£190.00

Immovable Property Tax
The registered owner of the property is liable for this annual tax. It is calculated on the market value of the property as at 1 Jan 1980, between 0 – 4% CY£ per thousand. Average cost would be CY£50.00 – CY£100.00 per unit. Example: IPT for a property worth CY£120,000 would be CY£50.

Value of Property	CY £ PER '000
Up to CY£100,000	Exempt
CY£100,001 - CY£250,000	2.5
CY£250,001 - CY£500,000	3.5
Over CY£100,000	4.0

VAT
VAT tax of 15% has been imposed on 1 May 2004 which will be added to all ‘New build’ that did not receive their permit before that date. – NOTE……..PLEASE check this info with CYPRUS office.




OTHER FEES AND CHARGES TO CONSIDER

Local Authority Taxes (Rates)
These are taxes paid to the Municipality and depend on the size, value and location of the property. They are for refuse collection, street lighting, sewerage, etc. An average yearly rate is approximately CY£50 -100.00


Insurance
If purchasing an off-plan property, the developer normally provides buildings insurance until the property is delivered. Thereafter the cost of building and contents insurance is the responsibility of the purchaser and an allowance of CY£100 per year can be made.


Maintenance
This covers an owner’s share towards the cost of cleaning and maintaining common areas and gardens, swimming pool expenses, electricity in common areas and repairs. The cost varies by development but an allowance can be made of CY£250 – CY£400 per year.


Solicitors Fees
If a solicitor is used their legal fees for property purchase ranges from CY£500 – CY£1000,00


Utilities
Charges for utilities are payable to the respective authorities at regular intervals throughout the year. While the cost will vary by property an allowance of CY£400 per year can be made.


OTHER ISSUES RELATED TO PROPERTY

Sale of your Property
If and when you decide to sell your property there are no restrictions on exporting your money from Cyprus (the original purchase price in addition to any profit) subject to payment of taxes.


Capital Gains Tax
Capital Gains Tax is levied at 20% on gains arising from the sale of your property. As a general rule the gain is the difference between the price of your property when sold, adjusted by an indexation allowance, less its original cost. The cost of any capital improvements amongst other costs can be offset against CGT. In addition there are generous exemption allowances currently in place. The original purchase price is linked to inflation thus reducing the tax liability drastically. Allowances:

• the 1st CY£10,000 gain is exempt from the disposal of any property


• the 1st CY£50,000 gain is exempt if the property was used for habitation by the owner (subject to conditions)

Note: The above allowances are not available separately


Inheritance Tax/Estate Duty
This tax was abolished in Cyprus as from January 2000 and is dependant on place of domicile. Residents domiciled in Cyprus are exempt from Estate Duty for worldwide assets. This is especially important for people with tax inheritance issues.


Bank Account
It is advisable after purchasing a property that you open a Bank Account to have all your bills paid by Standing Order as this is convenient, particularly if you are not permanently residing in the country.



Please note: All information supplied in this website by Mayfair London Properties has been prepared in good faith and should be looked upon as a guide only as laws can be subject to change without notice. We recommend that you seek advice from a specialised professional company for all tax and inheritance planning.