Cyprus became a full member of the EU on
1st May 2004 resulting in many changes for EU Nationals planning
to purchase property in Cyprus:-
1. An EU National resident in Cyprus is allowed to buy as much
property in Cyprus without restrictions. Does not need to obtain
approval from any authority. To prove residency in Cyprus an EU
apply to the District Administration for certification of this
residency by presenting personally Administration his passport
and pink slip (residency), which has already been obtained
Department, together with CYP5= cash.
2. EU Nationals who are not resident in Cyprus are permitted to
buy as much land as they wish but are restricted to purchase one
house or one apartment for which approval from the Council of
Ministers is required.
3. In order to comply with the idea of free movements of people
and goods certain restrictions have been lifted. Citizens of the
EU may enter Cyprus without restriction even with only their
National intendity card provided there is a photograph.
4. Exchange control restrictions are not longer in force and it
is no longer necessary to prove that the property was purchased
from External Funds.
COUNCIL OF MINISTER APPLICATION
According to current Cyprus legislation individual non -
Cypriots are eligible to purchase freehold property not
exceeding 4000 sq. meters in Cyprus. Once a property has been
identified and terms of payment agreed, a private contract is
entered into between buyer and seller. After signing and payment
of the deposit, the property cannot be offered to another party.
All contracts and other legal paperwork are in English.
For transfer of the property into an alien’s name (non EU
National who is resident in Cyprus) from the Council of
Ministers is required. The Council of Ministers has authorized
the District Office to grant approvals on its behalf. The
criteria taken into consideration in the process of examining an
application for the purchase of property include, inter alien,
the applicant’s family status, financial situated, occupation,
the purpose of acquiring the property, its location, etc.
Approval is granted applications for the acquisition of more
than one residence in Cyprus are not approved, except under very
exceptional circumstance. Under normal circumstances, the
processing of permits usually take from 6 to 12 months.
We are happy to assist with the legal formalities free of
charge, alternatively any local solicitor is able to undertake
these duties.
Permanent residential permit
This permit is easily obtained for persons who have purchased
property. The granting of the permit is also dependent on the
level of foreign income adequate to support oneself, such as
pensions and/or income from investments. We will assist you with
all these
formalities.
Tax advantage
In order to attract income from abroad the Government of Cyprus
is very generous with its incentives and various tax exemptions.
These include duty free importation of personal effects,
including cars, double taxation treaties with many countries and
additional benefits for offshore companies. Full details are
available on request.
Stamp duty
A one-off stamp duty is levied on the purchase of property in
Cyprus. The rates are dependent on the contractual purchase
amounts and payment is due within 30 days of signing the Sale
Agreement. The amount is payable by the purchaser to the tax
authorities. Purchase price in CYP Stamp Duty in %: Up to
100,000 1.50
Over 100,000 2.00
Transfer fees
The purchaser will be liable to pay the following transfer fees
for the property acquired, when this is registered in his/her
name at the Land Registry Office. The fees are charged on the
property’s market value at the date of purchase.
Property value in CYP Transfer Fee (% on property value)
Up to 50,000 3
From 50,001-100,000 5
From 101,000 and over 8
If the property is in joint names e.g. of a couple (husband and
wife) or two individuals, then the purchase value is divided
into two parts which results in reduced transfer fees.
The following example clearly illustrates this
For property purchased for CYP70,000 in one name, the fees
payable are CYP2,500=
For Property in one name
Up to CYP50,000 @3% = CYP1.500
The remaining CYP20,000 @ 5%= CYP 1,000
Total fees payable = CYP 2,500
For property in the names of two persons
First CYP35,000 @3% = CYP1,050 (share of husband)
Second CYP35,000@3% =CYP1,050 (share of wife)
Total fees payable =CYP2,100
Immovable Property tax
The registered owner is liable for this annual tax which is
based on the value of his/her property as of 1st January 1980.
Property with a value of up to CYP100,000 is exempt from
property tax. For property values exceeding this amount the
rates are:
Taxable value CYP Annual Tax (% on Taxable Value)
Up to 100,000 Nill
100,001 – 250,000 2.5
250,001 – 500,000 3.5
Over 500,000 4.0
Gapital Gains Tax
Capital Gains Tax is levied at 20% on gains arising from the
disposal of the property, however, for foreign owned property
that is sold. The first CYP10,000 – CYP50,000 in a private
residence sale is exempt and there is also an indexation
allowance. However, there is no tax to pay if there property was
acquired between 1 August 1980 and 13 July 1990 with foreign
currency imported into Cyprus.
Allowances
The following allowances are available to individuals:
The first CYP10,000 of gains arising from the disposal of any
property.
The first CYP50,000 of gains arising from the disposal of a
house used by the owner for his/her own habitation.
An individual claiming a combination of the above allowances in
only allowed a maximum allowance of CYP50,000= in total if the
owner resides in it continuously for at least five years prior
to disposal. Cyprus residents and companies registered in Cyprus
are subject to Capital Gains Tax when disposing of 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.
Estate Duty
Estate duty tax has been abolished as from the first of January
2000 (Statute No.78(1)/2000)
VAT
Since 1/5/04 a stature in respect of VAT on properties was
introduced. In addition to other amendments, this stature
introduced VAT on the rate of 15%.
TAX ADVANTAGES
Cyprus is unique when it comes to the taxation aspects of living
on the island.
The following income tax rates apply to individuals:
Chargeable income Tax rate Accumulated Tax
(CYP) % (CYP)
0-10,000 - -
10,001-15,000 20 1.000
15,001-20,000 25 2,250
over 20,000 30
Retirees who become residents in Cyprus are taxed on their
pensions from abroad at the rate of 5% per annum while an
exception for the first CYP2.000 is granted.
Additionally, Cyprus has Double Taxation treaties with many
European and other countries, safe-guarding its residents from
paying tax in both countries. This gives the option to the
citizens of those countries to take advantage of the very low
rate in Cyprus.
LOCAL AUTHORITY TAXES & RATES
Property taxes levied by the local authorities are in the range
of CYP30- CYP100 per annum depending on the size of the
property. The tax covers the cost of garbage disposal, street
lighting e.t.c.
The above information is subject to conditions, limitations,
exclusions, modifications, and/or discontinuation without
notice.
The basic utilities, electricity, water and telephone are
payable individually in accordance with the consumption and
based on a meter reading.
MORTGAGE FINANCE
THEOMARIA can offer assistance to all property buyers seeking a
mortgage from a Cyprus-based bank.
We can make the intoduction to bankers we know and trust, who
will offer high quality, fast and realiable service to our
clients.
Currently, non – Cypriot are allowed to borrow 70% of the
property purchase price from a local bank with repayment terms
up to 15years. To apply for a loan you will need:
1. Copy of passports (Husband and wife)
2. Statement of assets and liabilities (The form will be send to
applicants by the bank)
3. Bank reference letter from applicant’s UK Bank.
4. In case of existing loans in UK, detailed statement for the
past six months
5. Copies of pay slips or income statements for both husband and
wife (in case of employees) for the past three months.
In case of self employed persons, copy of the tax return form
from the previous financial year.
6. Copy of contract of sale and building permit
7. Down payment receipts
8. Evidence of current address (e.g. Water board bill)
BANK CHARGES
1% On the loan amount
INTEREST
The interest rate is fluctuating-Base rate (present 4.25%) plus
margin of 2.5%. Interest capitalization every six months.
GOVERNMENT CHARGES
Mortgage fees 1% of mortgage amount.
Mortgage stamp duty is 0.15% of mortgage amount + CYP5 one off
(0.20% for amounts over CYP100,000).
buy house in
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