Purchasing Property
Properties in Cyprus are on average 20% - 30% lower in prices than Portugal, 30% - 40% lower than Spain and 50% - 60% lower than Italy and France.

In comparison to many other countries the process of purchasing property in Cyprus by foreigners is very simple.

Non Europeans are entitled to freehold ownership of a villa, an apartment or a piece of land with maximum area of 4014 Sq.M.

Europeans are entitled to a freehold ownership of a villa or an apartment, In respect of plots of land, Europeans can purchase as many as they wish with no maximum size limit.

Foreign companies can acquire premises for their business or for holiday home for their directors.

The Title Deed - Top
Transfer of ownership from Vendor to Purchaser is undertaken by a simple procedure through the Cyprus Land Registry Office, either by the buyer in person or by appointing a third party with a Power of Attorney. The transfer of ownership requires a permit from the Council of Ministers

Residential Permits
Residential Permits are easily obtained for persons living in Cyprus, who have purchased property.

There are two kinds of permit, Temporary and Permanent

Temporary Permit
The granting of this permit requires the existence of a bank account in Cyprus and a sales agreement of the property purchased. Temporary residence status can be from one to four years.

Permanent
In addition to the above requirements, the applicant must establish evidence of a secured annual income of not less than CY£ 5.600 per person plus CY£2.700 for each dependant person. (Because of the entry of Cyprus to the EU, it is possible that for Europeans the law in respect of permits will change).

Europeans who acquire a permanent or a temporary permit can register in their name as many properties as they want provided that they sign a confirmation to the government that they will stay for the following five years in Cyprus.

For more up to date information please contact the Ministry of Interior, Nicosia.

Real Estate Transfer - Top
Real Estate Transfer tax-fees are necessary in order to transfer freehold ownership to the name of the purchaser. The Purchaser is responsible for the tax payment, when the deeds of ownership are to be transferred. The rates are calculated on a graduated scale.

Value of property (CY£) Transfer fee rate (%)
up to 50,000 ...................................3
from 50,001 to 100,000 ..................5
from 100.001 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 CY£ 70.000 in one name, the fees payable are CY£ 2.500.

For Property in one name
Up to CY£ 50.000 @ 3% = CY£ 1.500
the remaining CY£ 20.000 @ 5% = CY£ 1.000
Total fees payable = CY£ 2.500

For property purchased for CY£ 70.000 in the names of two persons, the fees payable are CY£ 2.100.
For property in the names of two persons
First CY£ 35.000 @ 3% = 1.050 (Share of husband)
Second CY£ 35.000 @ 3% = CY£ 1.050 (share of wife)
Total fees payable = CY£ 2.100

Property Taxes, Fees, Rates - Top
Immovable Property Tax
The annual immovable property tax is calculated on the market value of the property as at 1st January 1980.

Market value of property (CY£) Annual Property tax (%)
up to 100,000 ............................................exempt
100,001 to 250,000 ...................................2.5
250,001 to 500,000 ...................................3.5
over 500,000 .............................................4.0

Capital Gains Tax
On disposal of the property, capital gains tax will be payable at the rate of 20% on the gain with the first CY£10.000 being exempt for each person. The gains are the difference between the sales proceeds and the original cost of the property. In the case of a property which was purchased before 1/1/1980, the gains are the difference between the sales proceeds and the market value of the property as of 1/1/1980.

On top of this allowance, the seller is entitled to a further allowance regarding the transfer fees paid, inflation rate per year and the cost of any additions made to the house.

Gains from the disposal of a dwelling house are exempt up to CY£ 50.000 in total if the owner resides in it continuously for at least five years prior to disposal.

Stamp Duty
The purchaser is liable for the payment of stamp duty at the rate of 1.50 CY£ per thousand up to the value of 100.000 CY£ and thereafter at the rate of 2 CY£ per thousand.

For example if the purchase price is CYP 150. 000
first CY£ 100 000 1.5‰ .............................CY£ 150
next CY£ 50 000 2.0‰ ..............................CY£ 100
Total CY£ 250

Estate Duty
Estate Duty tax has been abolished as from the first of January 2000
(Statute No.78 (1)/2000).

Local Authority Taxes & Rates - Top
A rough guide could be approximately CY£ 50 -150 per year depending on the size of your property.

This tax is for refuse collection, street lighting, sewerage, etc.

The basic utilities, electricity, water and telephone are payable individually in accordance with the consumption and based on a meter reading.

Double Taxation Agreements
Cyprus has double-taxation agreements with Austria, Bulgaria, Canada the People's Republic of China, the Czech Republic, Denmark, Egypt, France, Germany, Greece, Hungary, India, Ireland, Italy, Kuwait, Malta, Norway, Poland, Romania, Russia, (Armenia, Belarus, Kurdistan, Moldova, Tajikistan, Turkmenistan and Ukraine) Slovakia, South Africa, Sweden, Syria, the United Kingdom, the United States, Yugoslavia (Serbia and Montenegro) and other countries.

The main purpose of these treaties is the avoidance of double taxation of income earned in any of the above countries. A credit is usually allowed against the tax levied by the country of the tax payer's residence for taxes levied in the other country.

Duty Free Privileges
Europeans who become permanent residents in Cyprus and were using in their country a car for at least six months, can bring their car to Cyprus and they will not pay import tax.

Furniture can be imported free of any taxes by Europeans or Non-Europeans who become permanent residents provided that they are for personal use and are not brand new.

VAT - Top
Since 1/5/04 a statute in respect of VAT on properties was introduced. In addition to other amendments, this statute introduced VAT on the rate of 15%.

Tax Advantages
Cyprus is unique when it comes to the taxation aspects of living on the island.

Retirees who become residents in Cyprus are taxed on their pensions from abroad at the rate of 5% for amount: exceeding £2.000 annually.

Of course as for all Cypriot tax residents their total annual income up to £9.000 (£10.000 from 2004) can be tax exempt provided that thereafter they will be taxed according to the scale Cypriots are taxed.

Note that one cannot benefit on both.