Gepo Estates Paphos, Cyprus

Non-Cypriots are entitled to purchase and have one freehold property registered on their names at any given time. The size of the land should not exceed the 3 donums (43,209 sq. ft / 4,012 m2), and the property can only be used for residence or holiday purpose. After May the 1st however, when Cyprus joints the EU such laws will eventually be abolished for EU Residence.

Firstly a preliminary contract is signed and a deposit has to be paid. The purchaser's lawyer will then carry out the search at the Land Registry Office to ensure that the property belongs to the vendor and to ensure that the purchaser will obtain title deeds of the property.

Non Cypriot citizens require permission from the Council of Ministers to purchase property in Cyprus. The permission to acquire property in Cyprus must be sought from the Council of Ministers by written application, which must be submitted after the agreement is signed. This permission is granted as a matter of course to all bona fide non-Cypriot purchasers. This procedure may take up to six months but in the meantime, there is no restriction in taking possession of your property.

After signing the purchasing contract, it is advisable to register the contract with the Land Registry Office in no more than 60 days after the contract is made. This procedure will guarantee the purchaser's ownership rights on his property until the title deeds are issued and to stop the seller or any other third party to lease, sale or mortgage the property for their own benefit.

Once the permission to purchase property from the Council of Ministers has been obtained, and the Central Bank of Cyprus confirms the receipt of the foreign funds, the title deeds can then be issued.
Note however, that for new properties may take up to 5 years to obtain the title deeds.

When the transfer of the property will finally be made on the purchaser's name, transfer fees have to be paid to the District Land Registry Office. These transfer fees, are based on the market value of the property at the time of purchase, and are calculated as follows:

For example if the value of the property is CYP120,000 the transfer fees will be calculated as follows:

If however the property is bought in joint names, for example husband and wife, the transfer fees are reduced dramatically since the value of the property is reduced by 50%. Using the same example as above with a property valued at CYP120,000 the charges will be as follows:

As you can see the amounts charged at higher fee have been reduced. There is no charge at 8% and at 5% only CYP20,000 has been allocated.

The Title Deeds are transferred into the buyer's name as soon as they are issued by the Land Registry Department, following the settlement of the agreed selling price. The relevant cost is born by the purchaser, as shown above.

The purchaser is also liable for the payment of Stamp Duty which has to be paid at the time of signing the contract. Stamp duty is levied at the rate of CYP1.50 per CYP1,000 up to CYP100,000 and thereafter the rate is CYP2 per CYP1,000. Note however, that the purchase contract must be stamped within 30 days from the date when it was signed otherwise a penalty fee will be imposed.

For anyone who owns property in Cyprus shall be liable to an annual immovable property tax as well which is calculated on the market value of the property as at 1st January 1980. Consider the following table:

For example an owner of a property with value of CYP150,000 will be taxed an annual immovable tax of CYP100 per year. This is calculated as follows:

• The first CYP100,000 are exempt
• The next CYP50,000 x 0.002 = CYP100.

After you purchase your property you will also have to consider the following charges:

The above amounts are deposits which you have to pay the relevant service provider and are refundable within the termination of the service.

There are also Local Authority Rates which vary depending on the size of the property and are between CYP 40-120 per annum. This tax is for refuse collection, street lighting etc.

Should the purchaser decides to sell his property, Cyprus Law provides that the full amount paid for it in foreign exchange may be transferred abroad at the time of the re sale. The equivalent of the full purchase price and any increase in value of the property may be transferred immediately.

Property sales in Cyprus are subject to Capital Gains Tax at the rate of 20% on the gain, however the first CYP10,000 per person are tax-exempt – (for a married couple is 2 x CYP10,000 = CYP20,000) -. There are also other allowances similar to the UK capital gains tax such as the indexation allowance which takes into account inflation, and allowances regarding the transfer fees paid and the costs of any additions or improvements made to the property.

In addition, any gains made from the sale of the property are exempt up to CYP50,000 if it can be proved that the particular property was the sellers primary dwelling house for at least five years.

Inheritance Tax was abolished in 2000.