As a non-Cypriot, what am I allowed to buy?
Property purchase in Cyprus is relatively easy. Non-Cypriots can buy and acquire the title deed of one property in Cyprus and second after some years. A non-Cypriot needs a Council of Ministers permit on order to register the property to his/her name, which nowadays is just a formality. Once the buyer finds the appropriate property that suites his budget and needs he then appoints a an independent lawyer whose duty is to make the necessary searches for the specific property and if everything is to the Lawyer’s satisfaction then the lawyer prepares the contracts which must be signed by both contracting parties; the contract then is stamped by the Tax Office and lodged in the Land Registry for specific performance purposes by the purchaser’s lawyer.
Do I need permission to buy property in Cyprus?
There is no need of permission to buy a property. However, you need the Council of Ministers Permit to register the property on to your name, provided that the separate title deed of the property is available. Application can be made by your lawyer or yourself. In the mean time you may take possession of the property without restrictions.
What are the terms of payment?
Once you have found a property you like, the first step is to reserve it. You will have to pay a small non-refundable reservation fee. By doing this, the price is secured and the property is taken off the market for one month until the Contract of Sales is signed and the first instalment is made. For a ready to move in or a re-sale property is payable in full within the agreed schedule with the developer. For the properties under construction a stage payment scheme is applicable.
Are there housing loans available in Cyprus?
Banks in Cyprus are able to offer mortgage facilities to assist with the purchase of a property. The maximum repayment period can be up to 40 years (or until 70 years old) and the maximum amount one can borrow is 70 % of the property price. The loans are offered either Euro or foreign currency, with fluctuating interest rate in the case of loans in Euro and option between fluctuating or fixed interest rate for loans in foreign currency.
How does the transfer take place?
How and at what cost do I get possession of the Title Deeds?
The Title Deed matter is something that everyone needs to understand clearly. If the property has been completed for some time and the separate title deed is available, the purchaser can acquire it immediately as soon as he obtains the council of Ministers Permit and the entire case can be completed without delay. In cases where the purchaser buys a property, which is not yet built or just completed, he cannot have the title deed on his name since the separate Title Deeds are not yet available. In this case, the vendor has a title deed of the land on which project is under construction. The issuance of the separate title deeds is a long procedure which the Developer takes through the various appropriate authorities before they are issued; The Vendor first applies and obtains the Town Planning Permit and then Building Permit. After the completion of the property the Vendor applies for the Certificate of Approval, Divisional License etc. The last two certificates/Licenses can only be issued after the completion of the project and it takes some time for the government departments to inspect the project and issue them. In cases where the purchaser buys a property that’s part of a project under construction, he must expect his separate title deed to be ready in approximately 4 to 6 years from delivery of the possession of the property. When purchasers acquire their title deed, it is the time for them to pay their transfer fees to the government.
The Transfer Fee is the most serious expense over and above the sale price that the purchaser bears and is calculated as follows based on the evaluation of the property (normally is based on the purchase price, unless the District Lands Officer evaluates the property at a higher value):
3% on the first EUR 85.430,07 of the value of the property
5% on the second EUR 85.430,07
8% on any amount above EUR 170.860,14
If there are two purchasers on the contract of sale, then the price is divided by two and therefore, they pay less transfer fees, as the first EUR 85.430,07 per person (e.g. EUR 170.860,14 together) is 3% and the second EUR 85.430,07 per person is 5% etc.
Can I sell the property before the separate title deeds are issued?
If at any time after the signing of the present Agreement the Purchasers desire to sell the Property, they have an absolute right in doing so as they are deemed to be the beneficial owners of the Property providing that the Purchasers have fulfilled all their obligations to the Developer.
Property sales in Cyprus are subject to Capital Gains Tax at a rate of 20%; however the first EUR 17.086 of profit is exempt.
Are there any fees payable over and above the price of the property for legal fees or stamp duty?
The purchase contract entails Stamp Duty which is payable within 30 days of signing the contract. Stamp Duty is levied at the rate of 0.15% per EUR 1.708,60 up to the value of EUR 170.860,14 and thereafter at the rate 0.2 %.
It is always advisable to appoint an independent solicitor in Cyprus. The fees depend on the property price and the solicitor but the charges are within the Cyprus Bar Association guidelines and generally are very reasonable.
What expenses does the owner of an apartment have to meet? What is the owners share?
Immovable Property Tax (IPT): The Purchaser is obligated to pay all Property Taxes including the IPT. This is a government imposed tax which is levied on the value of the property. Until the separate title deeds for each property are issued by the District Land Office, the Developer as the registered owner pays the relevant taxes once a year for all properties based on the estimated 1980 value of the properties as a whole in accordance with the instructions given by the tax office. The developer then uses the same percent estimation on the contract value, to allocate the taxes to each individual beneficiary “owner” of each property.
The rates for the payment of the immovable property tax, which is imposed on every person owning property in Cyprus, have changed. The rates effective as from the year 2012 are as follows:
Up to €120.000 - 0%
From €120.001 to €170.000 - 0.4%
From €170.001 to €300.000 - 0.5%
From €300.001 to €500.000 - 0.6%
From €500.001 to €800.000 - 0.7%
Over €800.001 - 0.8%
Municipality Property Tax: This is also a property tax which is paid to the local municipality, in accordance of the same procedure as above and then is allocated to the individual properties.
Sewerage Board of Pafos (SBP): This tax is also paid by the Developer as explained above until the issue of separate title deeds as a whole and then allocates to each property. This is a tax collected by the municipality of Pafos in order to put the whole area onto the mains sewage line.
Municipality/Council Tax: This Tax is paid directly by the individual owners to the Municipality or Town Council and it is billed by the Water Board once a year. This is for things like the street cleaning, street lighting, refuse collection etc.
Common Expenses: This is a fee for the maintenance of the communal areas on your project as per Contract of Sale and or Management Agreement. This charge is payable in advance every year, starting with the delivery of the property and covers the following:
• Landscape and garden maintenance.
• Pool and other common facilities maintenance
• Pool chemicals.
• Water supply for common areas.
• Electricity supply for common areas.
• Insurance cover for common areas.
• Cleaning services of common areas.
• Property management services of the whole project, not individual property management.
• Any gardening/cleaning equipment needed to perform the above tasks
Common Expenses are not applicable for the properties, which don’t have commonly owned facilities (e.g. private villas with individual pools).
In addition to the above expenses you will have to pay the electricity and water consumption, for which there are separate meters for each property.
Are there Private Health Insurance Schemes available?
A number of companies offer medical insurance schemes. Diverse schemes are tailored to individual needs and budgets, and can cover hospitalization at a hospital or clinic of your choice, outpatient consultation and medication.
Is the property insured?
During Construction the property is insured by the Developer. From the delivery date the Vendor arranges the property insurance on the name of the purchaser with a reputable insurance company at a fair market price and the purchaser is obligated to pay the premium. After the issue of the separate title and the transferring to the purchaser’s name the purchaser has the right to choose his own insurance company. The insurance costs per year vary depending on the value of the property insured. Contents insurance is strictly the owner’s option.
Are any after sales services available within the company?
Yes. Our After Sales team is available to assist you with a full line of services, making sure that the process of establishing your residence or holiday home here in Cyprus is as easy and pleasurable as possible. They will be happy to help you with any questions and queries you may have before and after the delivery of your new property. Some of their responsibilities are to assist you for, the Electricity, water and telephone connection, moving to Cyprus, the purchasing of household furnishings and appliances, Insurance policies for house and contents, life, medical and vehicles, iterior decorating, cleaning, gardening and pool maintenance services.
How do we go about getting Temporary Residence?
Temporary Residence is easily obtained once the applicant fulfils certain requirements. Residency application forms are available at the Civil Registry and Migration Department of the Ministry of Interior or at the District Aliens and Immigration Branches of the Police. Your Cyprus Solicitor will be able to assist you on this matter as well. All forms are bi-lingual (Greek/ English). Together with this form, you will be expected to also provide the following:
• Proof of identity: Your valid passport or EU identity card used when you entered the Republic of Cyprus.
• Photocopy of the identity document/ passport
• 4 passport size photos
• Sales contract
• Proof of private medical insurance
Are the properties subject to VAT?
Newly-built properties, for which a proper application for Planning permission has been submitted to the relative responsible authority after the 1st of May 2004 (when Cyprus joined EU), are subject to VAT at standard rate (currently 15 %). VAT is not applicable for properties with permits before 01/05/2004. However, someone buys his first property for his own use, he/she can make an application to the VAT department and purchase a property with just 5% VAT.
There are some conditions for such benefit:
• The building is new and used for the first time
• The total size of the covered areas of the residence does not exceed 250 sq. m
• The applicant is a person aged 18 years and above, being a Cypriot citizen or a citizen of a member state of the European Union who is permanently residing in the Republic of Cyprus and has no other property in Cyprus that is used as a permanent residence.
• Upon receipt of the grant, the beneficiary is obliged to use the property as his/her main and permanent residence for a ten-year period.