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Cyprus - Buying Property
from: by John MasonCyprus 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 restriction and does not need to obtain approval from any authority. To prove residency in Cyprus an EU National must apply to the District Administration for certification of his residency by presenting personally to the District Administration his passport and pink slip (residency), which has already been obtained from the Immigration Department, together with Cy.Ł25.00 in 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 identity card, provided there is a photograph.
4. Exchange control restrictions are no longer in force and it is no longer necessary to prove that property was purchased from External Funds.
5. Cyprus Investment Policy is liberal and allows 100% foreign participation in all sectors of the economy, not only for EU Nationals but also for investors from third countries, unless otherwise stated in the legislation; e.g. the acquisition and development of land.
COUNCIL OF MINSTERS APPLICATION
For transfer of the property into an aliens name, (non EU National who is resident in Cyprus) permission from the Council of Ministers is required. The Council of Ministers has authorized the District Officers 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 alia, the applicants family status, financial situation, occupation, the purpose of acquiring the property, its location, etc. Approval is granted in all bona fide cases.
Applications for the acquisition of more than one residence in Cyprus are not approved, except under very exceptional circumstances.
SEEKING EXPERT ADVICE
Expert legal advice should be sought before entering into any transaction for acquiring property in Cyprus. The best advice is to engage an independent lawyer who is registered at the Cyprus Bar. However the following points shall be noted:
• A search with the Lands Office must be made to ensure that the seller has a valid title to the property and that there are no mortgages over the property which would present problems with the transfer of ownership.
• In the cases of property under construction it must be checked that the planning and building permits can be obtained and separate title deeds can be issued. In the contract provisions must be made to provide for remedies in the failure of the Vendor to do so.
• A foreigner, other than EU Nationals can buy land for building, up to the extent of three donums. A permit to buy land outside the development area will probably be refused.
• It must be ensured that the land is suitable for building purposes i.e. zoning restrictions, building regulations, access to an official road, and availability of water supply, electricity and telephone lines.
• A married couple can only buy one house between them, not one each. (Not applicable for EU Nationals who are residents in Cyprus)
• A foreigner wishing to rent property for periods of 33 years or more requires the approval of the Council of Ministers.
• A foreigner can sell his house and buy another. Any bona fide repeat purchases will be granted a permit.
• A foreign purchaser may let their property only to residents of Cyprus (not short lettings).
• Any contract in the purchase/lease, etc. of real estate is valid, even if the Council of Ministers rejects the foreigners request. As such, when purchasing property ask for legal advice in order to ensure that the contract includes a provision for such an event so as to secure a refund or other remedy to cover such an unlikely occurrence. The time period required for obtaining an answer from the Council of Ministers, provided all documentation is in order is approximately six to twelve months.
TRANSFER FEES
The purchaser will be liable to pay the following transfer fees for the property acquired, when this is registered in their name at the District Lands office. The fees are charged on the propertys market value at the date of purchase.
Value of Property CyŁ Transfer Fee Rate % on property value
Up to Ł50,000 3.0% Ł50,001 - Ł100,000 5.0% Over Ł100,000 8.0%
For example:-
Transfer fee of a property valued at CYŁ130,000, provided such property is in one name the transfer fee will be:-
3% for the first CYŁ50,000 = CYŁ1,500 5% for CYŁ50,000 to CYŁ100,000 = CYŁ2,500 8% for CYŁ30,000 CYŁ2.400 Total Transfer Fee CYŁ6,400
Should the property be in joint names the transfer fee will be:-
3% for the first CYŁ50,000 X 2 = CYŁ100,000 = CYŁ3,000 5% for CYŁ30,000 = CYŁ1,500 Total Transfer Fee CYŁ4,500
IMMOVABLE PROPERTY TAX
The registered owner of the property is liable to an annual immovable property tax calculated on the market value of the property as at 1 January 1980. The tax is imposed on the value of the whole of the immovable property someone owns, so a Purchaser may have to pay immovable property tax prior to the transfer of the property to his name which can be claimed back with the actual transfer of title deed to his name.
Market Value CYŁ Annual Tax CyŁ per thousand
Up to Ł100,000 Zero Ł100,001 - Ł250,000 Ł2.5 Ł250,001 - Ł500,000 Ł3.5 Over Ł500,000 Ł4.00
John Mason is the owner and author of http://downtoearthcyprus.net. Down to Earth,Cyprus provides all you need to know about property purchase and finance in Cyprus.Your Definitive Guide to Buying Real Estate in the Republic of Cyprus.
You may freely distribute this article on condition that you keep this Author bio intact with an active link to my website.
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